18 January 2013

ECOFIN Council: Irish Presidency work programme

The overarching theme of the Irish Presidency is to secure stability and ensure that it leads to jobs and growth. In addition to the measures being pursued in the ECOFIN Council, there will be horizontal work ongoing across other Council formations to support this approach.

It is clear that there cannot be growth or employment without responsible and sustainable fiscal, monetary, financial and economic policies. Growth and fiscal friendly policies that are consistent with and complement such policies are essential to help increase employment across the Union. In terms of the specific elements of the ECOFIN Council to support growth and promote employment, the Presidency will seek to:

• effectively implement the economic governance measures within the framework of the European Semester and the Annual Growth Survey and finalise the remaining measures o continue work on strengthening the European Union financial services framework and specifically the single supervisory mechanism of the banking union measures;
• support the further development of economic and monetary union;
• promote work on various key taxation issues;
• effectively represent EU Member States in G20.

Towards enhanced economic governance and policy coordination

The European Semester and economic governance (‘Two-Pack’) proposals are the building blocks for strengthening fiscal discipline and introducing stricter economic surveillance and they are essential in progressing towards sounder public finances and financial stability thereby reducing uncertainty and creating the basis for economic growth and increased employment in the European Union.

The European Council in December 2012 mandated the completion and implementation of the framework for stronger economic governance and the rapid adoption of the “Two-Pack” of economic coordination measures by the co-legislators. The Presidency will seek to complete the “Two-Pack”, as a matter of priority. Once adopted, the Presidency will work towards the successful implementation of these instruments.

As Presidency, Ireland will manage the third European Semester process. The European Semester, which has been in place since January 2011, represents a new approach to economic surveillance. It was devised with the aim of ensuring that all Member States’ economic policies are analysed and assessed together and that policy areas which previously were not systematically covered by economic surveillance – such as macroeconomic imbalances and financial sector issues – are included. Effective management of the third European Semester cycle will be an important focus of the Irish Presidency to ensure the credibility of the process and create certainty about economic reforms in Member States.

An important aspect of the European Semester is the Macroeconomic Imbalance Procedure, (MIP) introduced by the ‘Six-Pack’. The MIP for the 2013 Semester was kick-started by the publication in November of the Alert Mechanism Report which listed a number of Member States requiring In-Depth reviews.

The February ECOFIN is expected to adopt Conclusions for submission to the March European Council giving macro-economic and fiscal guidance to Member States in relation to their Stability and Convergence Programmes and National Reform Programmes. The guidance given will also take into account their obligations under the Euro Plus Pact. In March, the Commission is expected to adopt the in-depth reviews mandated by the Alert Mechanism Report.

On the basis of examination of the National Reform Programmes submitted and the contents of the in depth reviews, the ECOFIN will be asked to adopt Council opinions and country specific recommendations in June 2013 to be put forward to the June European Council. In addition, the Irish Presidency will contribute to the effective implementation of the commitments in the Euro Plus Pact...

Strengthening financial regulation and supervision

The Presidency is committed to making progress on the financial regulatory agenda. Improving and enhancing the regulation and supervision of the financial sector is an essential requirement to improve the stability and viability of this sector. A strong and well regulated financial services sector is essential to the financing of economic growth and the creation of employment. It increases the confidence of depositors in the financial system and provides more certainty to borrowers.

Getting agreement on the final aspects of the banking union measures is an important component of the strands of moving towards a genuine economic and monetary union. The Irish Presidency will, in accordance with the conclusions of the December 2012 European Council, prioritise legislation to achieve a Banking Union and in particular the Commission’s proposals on banking supervision, bank resolution and recovery and deposit insurance to protect consumers. The Irish Presidency will also support the development of institutional and political structures to support the new Banking Union and to ensure an effective and smooth transition to the new framework. The successful implementation of the Banking Union measures should help break the link between the financial sector and the sovereign.

The Single Supervisory Mechanism (SSM) is an important foundation to ensure confidence in supervision across Europe. A Council general approach was reached at ECOFIN on 13th December. This agreement provides the mandate for the Presidency to enter into discussions with the European Parliament. The Capital Requirements Directive IV (CRD IV) seeks to ensure that the effectiveness of regulation of credit institutions and investment firms in the EU is strengthened and that financial stability is enhanced. The proposals also aim to transpose the international agreement on banking supervision reached by the Basel Committee on Banking Supervision as endorsed by the G20 Leaders. The Irish Presidency will prioritise reaching an early agreement with the co-legislators on both of these elements. On Banking Resolution the Council Conclusions urge co-legislators to agree on the proposals for a Recovery and Resolution Directive and for the DGS Directive before June 2013.

Important files on the markets side include the Markets in Financial instruments Directive and Regulation (MiFID/MiFIR) which seeks to harmonise national provisions concerning access to the activity of investment firms and related service providers, the modalities for their governance and their supervisory framework. The proposals are in line with the Presidency’s objectives of promoting greater confidence by making financial markets more efficient, resilient and transparent as well as strengthening the protection afforded to investors.

The Irish Presidency aims to conclude an agreement with Council as soon as possible and conduct a number of trilogues with the Parliament in the markets and securities area including Market abuse (MAD/MAR). It will also make progress on other dossiers in the consumer area, including the Mortgage Credit Directive.

Economic and Monetary Union

The document Towards a Genuine Economic and Monetary Union was presented on 5 December last and the contents of the report are reflected in the conclusions of the December 2012 European Council. The Presidency notes the intention of the President of the European Council to produce further proposals and a time-bound roadmap for further economic and fiscal governance reforms by June 2013 and, as Presidency, will contribute constructively to this process, particularly in relation to any tasks conferred on it by the President of the Council. The objective of such measures is to create a stronger and more effective EMU that can aid confidence and support economic recovery and employment growth across Europe.

Taxation

On the issue of Financial Transaction Tax (FTT) first of all the Presidency will facilitate the decision-making process for the Council to move forward under enhanced cooperation if so decided by the Council. After that the Presidency will work to bring forward the Commission proposal under an enhanced cooperation procedure for a Financial Transaction Tax, in the event that the proposal is published during the first half of 2013. The Presidency notes the extensive work that has been carried out to date on the development of this proposal.

The Irish Presidency will also carry forward the discussions on the Common Consolidated Corporate Tax Base (CCCTB). The Presidency will also work towards agreement of the revised Savings Directive and the negotiating mandates with third countries, in line with the direction of the European Council...

Work Programme

Economic Dialogue, 22.1.13

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