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In today’s ECOFIN meeting, the first under the Cyprus Presidency, ministers had a fruitful discussion on the way forward related to the “two pack”, shaping the Council’s position on this issue. The debate took into account the adoption of the European Parliament’s position on June 13, and the outcome of the Ad Hoc Working Group on Economic Governance that took place on the 4 July, 2012.
The aim of the “two pack” is to complement what has already been agreed under the “six pack” legislation, mainly through enhancing macro-economic surveillance for countries under Excessive Deficit Procedure or countries under a Macro-economic Programme. There are also provisions for submitting draft budget plans to the European Commission in order to issue an Opinion.
Cyprus’ Minister of Finance, Vassos Shiarly, who chaired the Council, says: “The Council agreed its position in February and we will base our negotiations on that position. The Parliament established its negotiating position in June and it introduced some significant changes to the texts. Some of the Parliament's proposals, such as a common debt agency, a debt redemption fund, or the introduction of the balanced budget rule in secondary legislation, raise fundamental legal questions.”
Follow up to European Council
The ministers also exchanged views on what was agreed during the last European Council of 28-29 June 2012.
In that meeting, the heads of state or government decided on a "Compact for Growth and Jobs", providing a coherent framework for action at national, EU and euro area levels, using all possible levers, instruments and policies. The Compact includes, among other, provisions for the mobilisation of €120 billion for boosting the Union’s economy, increase of European Investment Bank’s paid-in capital by €10 billion, swift implementation of the Project Bond pilot phase, and further deepening of the Single Market.
The European Council also decided for the creation of a single European supervisory mechanism for banks, as an important step to break the vicious circle between banks and sovereigns.
According to Mr Shiarly, the procedure for the establishment of a single banking supervisor will depend first of all on presentation by the European Commission of its proposals.
Furthermore, Finance and Economy Ministers conducted a first exchange of views on European Commission’s proposal for the recovery and resolution of credit institutions and investment firms, as well as on how to improve the European Semester process.
Lastly, the ECOFIN Council recommended the nomination of Yves Mersch to the executive board of the European Central Bank for a term of eight years, and issued a revised recommendation on measures to be taken by Spain to correct its government deficit, providing an extra year until 2014 on account of adverse economic circumstances.