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Brussels, 7 March 2014
Preparation of Economic and Finance Ministers Council, Brussels, 11 March
The EU's Council of Economic and Finance (ECOFIN) Ministers will take place in Brussels on 11 March at 10.00. The European Commission will be represented by Olli Rehn, Vice President and Commissioner for Economic and Monetary Affairs and the Euro, Michel Barnier, Commissioner for Internal Market and Services, and Algirdas Šemeta, Commissioner responsible for taxation and customs union, audit and anti-fraud. A press conference is expected to take place after the meeting.
Taxation of savings income (ET)
Responding to the call of the December European Council, the ECOFIN Council will seek to adopt the proposal to amend the Savings Tax Directive. The proposal aims to close loopholes and improve the functioning of the current legislation (a specific memo will be published ahead of the meeting). This proposal is one of the key actions of the Commission's plan to fight against tax fraud and evasion (IP/12/1325), as it will extend the scope of automatic exchange of information within the EU. Adoption of the proposal will demonstrate the EU's commitment to remain a front runner in implementing automatic exchange of information.
Commissioner Šemeta will also update the Finance Ministers on the good progress being made in tax negotiations with Switzerland, Monaco, Andorra, San Marino and Liechtenstein.
Single Resolution Mechanism (CH)
In October 2013, the Council gave the final green light to the Single Supervisory Mechanism (IP/12/953), the first leg of the Banking Union, which fully entrusts the European Central Bank (ECB) with the direct supervision of banks in the euro area. Supervision alone tough is not enough. A banking union also requires action to restructure non-viable banks when necessary. The supervisory system needs to be complemented by an integrated European resolution system for all countries participating in the banking union.
That is why the European Commission has proposed a Single Resolution Mechanism (SRM) for the Banking Union on 10 July 2013 (IP/13/674), which includes a single resolution board and a single resolution fund so we can tackle future bank crisis efficiently with minimal costs to taxpayers and the economy.
The SRM will basically apply the substantive rules of the draft Bank Recovery and Resolution Directive (see IP/12/570 and MEMO/12/416) in a coherent and centralised way ensuring consistent decisions for the resolution of banks. At the December 2013 ECOFIN, the Council agreed on a general approach thus giving a mandate to start the negotiations with the European Parliament (MEMO/13/1186).
During the upcoming ECOFIN, the Greek Presidency will inform Ministers of progress in the trilogue process with the European Parliament. It will also hold a discussion on outstanding issues with a view to progressing towards agreement with the European Parliament in the next trilogue.
Commissioner Barnier welcomes the efforts and commitment of the Greek Presidency to explore compromise solutions to achieve rapid agreement between the co-legislator on the SRM proposal. He welcomes Member States' overall support for an effective resolution mechanism for the Banking Union and looks forward to constructive and detailed discussion on Tuesday. The timetable is critical to allow the legislative procedure to be finalised before the end of the current term.
Follow-up to G20 Meeting of Finance Ministers and Governors (Sydney, Australia, 22-23 February 2014) (SOC)
The Commission will inform the ECOFIN Council of the main outcomes of the first G20 Finance Ministers and Central Bank Governors meeting of the Australian G20 Presidency held in Sydney on 22-23 February 2014.
The issues at the centre of discussion in Sydney were the global economic outlook and the development of comprehensive growth strategies for the G20 for the summit in Brisbane in November. Despite the recent improvements, there is no room for complacency and ambitious action needs to be taken to face the challenges of the global economy. Therefore, the last G20 meeting made progress in shaping ambitious growth strategies for the Brisbane Summit, by agreeing on an aspirational growth objective for the G20 of more than 2% of additional growth over the period up to 2018.
As VP Rehn said when presenting the winter forecast on 25 February: "All in all, the worst of the crisis may be behind us, but this is not an invitation to be complacent... To make the recovery stronger and create more jobs, we need to stay the course of economic reform. This message was clearly underlined by the G20 and our partners in the G20 last weekend in Sydney."
More specifically on the global outlook, note was taken of the recent financial market developments in some emerging market economies. The Central Banks of advanced economies made an effort to explain their policies while the authorities of emerging market economies acknowledged the need to strengthen their domestic macroeconomic and macro-prudential frameworks.
G20 members also discussed issues related to financial regulation and tax transparency; on the former, the G20 members agreed on the work programme in 2014 and acknowledged that focus now must turn to implementation of the policy initiatives already initiated. On tax transparency, the G20 endorsed the OECD Common Reporting Standard for automatic exchange of tax information and the Base Erosion and Profit Shifting Action Plan. (see statement by Commissioner Šemeta STATEMENT/14/16)
Preparation of the European Council on 20-21 March 2014 (SOC)
Economic elements of the EU 2030 energy and climate framework
Energy affects macroeconomic performance through several channels, the main one being the link to competitiveness, since energy costs affect the production costs of industries and services, as well as the purchasing power of households and the overall external balance (see report on "Energy Economic Development in Europe" MEMO/14/47).
The Commission adopted a proposal for the 2030 energy and climate policy framework on 22 January 2014 (see IP/14/54). The upcoming discussion at the ECOFIN Council meeting will provide an input to the European Council in March, which will discuss the framework proposal.
The ECOFIN Council discussion will focus on the major economic issues in this package. The aim is to ensure that these aspects are covered and taken into account by the European Council, which also will receive input from the Energy and Environmental Council formations.
The economically relevant aspects of the package include, beyond the need to complete the internal energy market, inter alia, (i) one reduction target for greenhouse gas emission of 40% by 2030, which should ensure a cost-effective path towards our 2050 ambition, (ii) an improved and strengthened EU ETS (Emission Trading Scheme), which should remain the key policy instrument for achieving cost-efficient emission reductions, and (iii) a renewable target for the EU level, which should provide room for more market-driven and cost-efficient deployment of new technologies.