05 May 2009

ECOFIN 5 May

The Council took note of progress on four financial services dossiers including Solvency II and Credit Rating Agencies which will be formally adopted by the Council at a forthcoming meeting, once the texts have been finalised.

The Ministers were informed of the course and results of the meeting of the G20 Finance Ministers that was held on 24 April as part of the IMF spring meeting in Washington. They discussed the implementation of the decisions taken at the G20 summit in London.

 

The ECOFIN Council agreed on the necessity to accelerate the work on the joint EU position for the September summit in the USA. The Ministers also touched upon the issue of accounting standards and decided to discuss it again at their meeting in June.

 

The Council took note of progress on the financial services dossiers:

 

Ø       Solvency requirements for insurance companies (draft "Solvency II" directive)

Ø       Credit rating agencies (draft regulation)

Ø       Electronic money (draft directive)

Ø       Cross-border payments in the EU (draft regulation)

 

On all four dossiers, the presidency has reached agreement with the European Parliament in first reading, enabling adoption by the Council at a forthcoming meeting, once the texts have been finalised.

 

Main results of the Council

The Council approved an increase, from EUR 25 billion to EUR 50 billion, of the lending ceiling for the EU's support facility for non-euro area member states in financial difficulty.

The support facility has recently been used to provide medium-term assistance to Hungary and Latvia, as part of broader assistance from the IMF and other creditors. The increase in the ceiling is intended to cater for potential demand from member states in the light of the economic and financial crisis. In this context, the Council agreed to provide medium term assistance to Romania.

 

The Council also adopted conclusions on the quality and sustainability of public finances, following an update of age-related expenditure projections for the EU's member states.

The conclusions highlight the importance of long-term planning of public finances, despite the current difficult economic circumstances. They emphasise the diversity of situations in different member states, along with the need to address the impact of ageing populations both on public expenditure and on potential growth rates.

 

The Council adopted the legal texts that result from its political agreement in March on the use of reduced VAT rates in certain sectors, and on a specific VAT derogation for the United Kingdom, aimed at tackling fraud.

 

The Council adopted regulations facilitating access to grants from the European Social Fund so as to mitigate the social impact of the financial crisis, and making energy efficiency improvements and renewable energy schemes eligible for support from the European Regional Development Fund. Both texts are part of the European economic recovery plan approved in December.

 

It also adopted conclusions on economic achievements and challenges, five years after the EU's biggest-ever enlargement.

 

Council press release

Presidency press release

 

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