The EU's Council of Economic and
Finance (ECOFIN) Ministers will take place in Brussels on 28 January at
10.00. The European Commission will be represented by Olli Rehn, Vice
President and Commissioner for Economic and Monetary Affairs and the
Euro and Michel Barnier, Commissioner for Internal Market and Services. A
press conference is expected to take place after the meeting.
Implementation of the Single Supervisory Mechanism: state of play (CH)
On 12 September 2012 the
Commission adopted two proposals for the establishment of a single
supervisory mechanism (SSM) for banks led by the European Central Bank
(ECB). The proposal for the SSM regulation aimed to confer upon the ECB
specific supervisory tasks over credit institutions in the Euro area.
The accompanying proposal for the regulation on the European banking
Authority (EBA) aimed to introduce limited amendments to the Regulation
setting up the EBA to ensure a balance in its decision making structures
between the euro area and non-euro area Member States (see IP/12/953).
The rules adapting the operating
rules of the European Banking Authority (EBA) to this new framework
entered into force on 30 October 2013 and on 4 November 2013, the SSM Regulation entered into force. This mechanism will be fully operational in November 2014.
In the meantime, the ECB is actively preparing to take up its new role of supervisor.
The ECB is currently carrying out a comprehensive assessment of all
banks which will be under its direct supervision and the balance sheets
of those banks. In parallel it is recruiting high quality supervisory
staff (MEMO/13/1155) and building up a new supervisory structure that integrates national supervisors before it commences its activities.
The establishment of the Single
Supervisory Mechanism (SSM) is a first step towards a banking union and
one of the pre-conditions for direct recapitalisation by the ESM. An
integrated “Banking Union” will also include a common bank resolution
mechanism, underpinned by a single rulebook.
During the upcoming ECOFIN Council meeting, ministers will take stock of the operational implementation of the SSM.
Commissioner Barnier welcomes the
significant progress made towards operationalizing the SSM over the last
months which will allow for a smooth transition to the new supervisory
regime.
More information:
Presentation of the Greek Presidency's work programme (SOC, CH)
At the start
of the Greek Presidency of the Council, the Economic and Finance
Ministers will discuss the priorities of the Council in the field of
economic and financial affairs for the first half of 2014. The
Presidency programme aims at supporting growth and employment and restoring confidence in the financial sector.
The Commission agrees
with the Presidency that the focus should be on effective
implementation of the economic governance mechanisms (including the
European semester) and on improving the financing of the economy.
The Commission also shares the view that it is essential to finalise the
legislative work underpinning the banking union before the end of this
legislature. (for an overview of what has been done so far to create a
robust financial framework for all 28 Member States and where we stand
in building the banking union see MEMO/14/57)
Further, the Commission welcomes
the Greek Presidency's determination to make progress on key tax files.
These include agreement on widening automatic exchange of information
within the EU (Administrative Cooperation Directive IP/13/530),
progressing the Financial Transaction Tax under enhanced cooperation,
and pushing forward the political debate on the Common Consolidated
Corporate Tax Base (IP/11/319). The Greek Presidency will also seek progress on other important tax files, including the Standard VAT Return (IP/13/988) and VAT Vouchers (IP/12/464).
Implementation of the Stability and Growth Pact – Decision on the existence of an excessive deficit in Croatia (SOC)...
Croatia joined the European Union on 1 July 2013 and as spelled out in the Accession Treaty, it is now subject
to the procedures for the surveillance of the excessive deficits as
laid down in Article 126 of the Treaty on the Functioning of the
European Union (TFEU).
In view of the high deficit and debt levels for 2012 reported by the authorities in the
autumn, subsequently validated by Eurostat, and the further
deterioration in the deficit and debt ratios in 2013 and over the
forecast horizon (2014-15), as shown by official projections and the
Commission forecasts, the Commission adopted a Report on 15 November
2013 based on Article 126(3) TFEU. The Commission report concluded that Croatia's deficit and debt are in breach of the reference values in the Treaty.
On 10 December, the Commission proposed to the Council to open an
Excessive Deficit Procedure for Croatia on account of both the deficit
and debt criteria (see MEMO/13/1124).
In order to put
an end to the excessive deficit situation, the Commission recommends a
credible and sustainable fiscal consolidation path. More
specifically, Croatia should correct the present excessive situation by
2016 and reach the following annual deficit targets of 4.6% of GDP for
2014, 3.5% of GDP for 2015 and 2.7% of GDP for 2016. This adjustment
path would also ensure that the debt ratio
approaches the 60%-of-GDP reference value at a satisfactory pace, thus
complying with the government debt criterion. The correction of the
excessive deficit would benefit from much needed macro-structural
reforms to reinforce the growth potential of the economy, by creating a
more flexible labour market, improving the quality of the business
environment and increasing the efficiency of public administration.
The Commission also recommended that the Council set
a deadline of 30 April 2014 for Croatia to take effective action (i.e.
to publicly announce or take measures that are sufficient to ensure
adequate progress towards the correction of the excessive deficit) and
to report in detail on the consolidation strategy it will put in place.
EU
Finance Ministers will discuss the EC Recommendations and are expected
to adopt a Council Recommendation to correct the excessive deficit and
bring the debt path in line with what is required.
More information:
Follow-up to the European Council meeting on 19-20 December 2013 – Implementation of the Compact for Growth and Jobs (SOC)
The Compact for Growth and Jobs agreed by Heads of State or Government at the European Council in June 2012 (MEMO/12/497).
It contains a wealth of measures to help Europe move beyond the
economic and financial crisis and to create smart, sustainable,
inclusive, resource-efficient and job-creating growth. It is designed to ensure faster progress towards the goals set out in the Europe 2020 strategy.
The conclusions of the European
Council meeting on 19-20 December highlighted that the Compact for
Growth and Jobs remains one of the EU's major tools to restore
sustainable, job-creating growth and strengthen EU competitiveness.
The European Council underlined
that the EIB had met its 2013 lending targets under the Compact and that
the adoption of the 2014-2020 Multiannual Financial Framework and
associated financial programmes support the achievement of the Europe
2020 Strategy. While substantial progress has been achieved in a number
of areas, efforts should be pursued to ensure that the potential of the
Compact is used to its fullest extent. In particular, the European
Council called for enhanced efforts as regards the swift adoption of
remaining legislation under the Single Market Acts I and II, and the
swift implementation of the measures they contain. Further actions to
reduce the burden of regulation are also necessary.
The Council will exchange views on
the implementation of the Compact for Growth and Jobs further to the
last European Council meeting.
The Commission will reiterate its
commitment to work with the European Parliament and the Council to
secure its swift implementation.
More information:
Other items – Current legislative proposals
The Council will be updated on current legislative proposals.
Enormous progress made in recent
weeks to find compromises on a whole raft of legislative procedures
which ensure that we are learning all the lessons of the financial and
implementing the G20 commitments. The following weeks will be crucial to
finalise those compromise amendments and reach agreement on outstanding
files in particular:
Single Resolution Mechanism - SRM (CH)
The supervisory system needs to be
complemented by an integrated European resolution system for all
countries participating in the banking union, which also requires action
to restructure non-viable banks when necessary.
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.
During the upcoming ECOFIN Council
meeting, the Greek Presidency will update the Economic and Finance
Ministers on the on-going trilogues on the SRM proposal and on
discussions on the intergovernmental agreement regulating the
functioning of the Single Resolution Fund.
Commissioner Barnier welcomes the
efforts and commitment of the Greek Presidency to achieve rapid
agreement on the SRM proposal. He welcomes Member States' overall
support for an effective single resolution mechanism. Flexibility on
both sides will be essential to find a final compromise text. The
timetable is critical to allow finalising the legislative work
underpinning the banking union before the end of this legislature.
More information:
