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Preparation of Eurogroup and Informal Economic and Finance Ministers Council, Luxembourg, 19 and 20 October 2009

European Commission - MEMO/09/461   19/10/2009

Other available languages: none

MEMO/09/461

Brussels, 19 October 2009

Preparation of Eurogroup and Informal Economic and Finance Ministers Council, Luxembourg, 19 and 20 October 2009

EUROGROUP (AT)

Eurogroup Ministers will meet at 19h00 on Monday 19 October in Luxembourg. Joaquín Almunia responsible for Economic and Monetary Affairs will attend. A press conference is expected to take place after the meeting.

Ministers are expected to assess and follow up to the outcome of the IMF Annual Meetings in Istanbul namely on the governance of the IMF and how best to enhance the euro area voice and representation in the Fund and at the G20. The G20 Summit in Pittsburgh has designated the G20 as the premier forum for international economic cooperation and agreed to launch a new economic surveillance process entitled "A Framework for strong, sustainable and balanced growth". Euro area ministers are expected to prepare a contribution on balanced growth as input to the new Framework, which is due to be launched at the G20 ministerial meeting on 6-7 November, in St Andrews, Scotland (see also below).

As usual, ministers are also expected to discuss economic and financial developments . For the latest data and indicators on euro area go to:

http://ec.europa.eu/economy_finance/db_indicators/db_indicators9237_en.htm

Ministers will also hear about preparations of the national budgets for 2010 as part of the ongoing discussion on exit strategies . They are also expected to hear the views of new Greek finance minister George Papaconstaninou, notably on Greece's fiscal policy strategy.

ECOFIN (AT)

Preparation for the G20 Finance Ministers meeting on 6-7 November 2009 (AT)

The Ecofin will also need to prepare the G20 Ministerial meeting that will take place at St Andrews/Scotland. There are three priority items on the agenda (i) launching the new G20 framework for growth; (ii) developing exit strategies; (iii) developing options on climate financing.

The Stability and Growth Pact, the Lisbon strategy for structural reforms and the Single Market Strategy lay the foundations for the EU's medium-term policy strategy towards strong, sustainable and balanced growth.

Ministers generally agreed that it is necessary to start designing credible exit strategies, and to communicate them clearly, even if the timing of their implementation is conditional on the economic scenario and may have to be differentiated across countries.

On climate financing, Europe has a strong forward agenda. An agreement at the G20 will require fair burden sharing based on a global contribution key, adequate governance, and delivery of specific ambitious action by everybody.

Preparation for the 29-20 October European Council

Exit Strategy

Ministers are expected to agree conclusions on the fiscal exit strategy along the lines already communicated at the Göteborg informal Ecofin earlier this month. They are expected to say that the economy remains fragile and that it is not time yet to withdraw the government support. But that it is necessary to start designing credible exit strategies, and to communicate them clearly, even if the timing of their implementation is conditional on the economic scenario and may have to be differentiated across countries. Timing will be reassessed on the basis of the Commission autumn economic forecasts that will be published on 3 November, and include its first forecast for growth in 2011.

Financing of climate change (BH/AT)

Ministers are expected to adopt Council conclusions on increasing and strengthening international climate finance. Together with the conclusions to be adopted by the Environment Ministers on the following day, these will form the basis for discussions at the European Council at the end of the month, when EU leaders are expected to determine the EU position on increasing climate change finance for the United Nations conference in Copenhagen this December. The aim there will be to achieve agreement on ambitious reductions in global greenhouse gas emissions to avert the risk of dangerous climate change.

The Ecofin Council is expected to agree conclusions setting out a detailed blueprint for the EU position on climate finance. This should include “fast start” finance to enable the rapid implementation of the Copenhagen agreement; the range of financial support the EU would be willing to provide to support an ambitious agreement in Copenhagen; and arrangements for the effective governance of these increased amounts of financial support.

Financial Supervision

The Ecofin ministers will have a first formal discussion on the package of draft legislation to significantly strengthen the supervision of the financial sector in Europe that was presented by the Commission on 23 September. The aim of these enhanced cooperative arrangements is to sustainably reinforce financial stability throughout the EU; to ensure that the same basic technical rules are applied and enforced consistently; to identify risks in the system at an early stage; and to be able to act together far more effectively in emergency situations and in resolving disagreements among supervisors. The legislation will create a new European Systemic Risk Board (ESRB) to detect risks to the financial system as a whole with a critical function to issue early risk warnings to be rapidly acted on. It will also set up a European System of Financial Supervisors (ESFS), composed of national supervisors and three new European Supervisory Authorities for the banking, securities and insurance and occupational pensions sectors. The proposals will go a long way towards tackling the imbalances in our financial systems and solving the weaknesses in financial supervision system that are at least partly to blame for the financial crisis (see IP/09/1347 MEMO/09/404 and MEMO/09/405 ).

Strengthening EU financial stability arrangements (AT)

The Council is expected to adopt conclusions on strengthening EU financial stability arrangements, including an accompanying roadmap reflecting the timeline for the reforms in the area of financial supervisions, stability and regulation.

Taxation (MA)

Anti-fraud agreements with third countries: Liechtenstein

The Presidency will try to reach political agreement on the EU-Liechtenstein anti-fraud agreement. This is to allow the Commission to initial the draft cooperation agreement negotiated between the European Community and its Member States, on one hand, and the Principality of Liechtenstein, on the other hand, to combat fraud and any other illegal activity which detrimentally affects their financial interests, and to ensure the exchange of information on tax matters .

After long negotiations with Liechtenstein, the EU is close to concluding this anti-fraud agreement, an important component of which concerns fiscal cooperation. The objective of this agreement is to increase the capacity of all Member States to fight against tax fraud and any other illegal activity which detrimentally affects their financial interests.

In the light of international developments, this agreement would be a significant achievement both in stepping up the European response to combating fraud, and in strengthening the exchange of information and transparency for tax purposes.

Anti-fraud agreements with third countries: Other third countries

The Presidency will try to reach political agreement to give the Commission a mandate to negotiate anti-fraud agreements with Andorra, Monaco, San Marino and Switzerland.

On 30 June 2009, the Commission adopted a Recommendation to the Council to authorise the opening of negotiations with these four countries. The aim also here is to combat fraud and other illegal activity, and to ensure administrative cooperation through the exchange of information on tax matters.

EIB: Eastern Partners Facility (AT)

Over lunch, Ministers will discuss the EIB proposal for a new Eastern Partners Facility (EPF) dedicated to support foreign direct investments in the region.


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