Ministers reached a political agreement on the Recovery and Resilience Facility (RRF), the main instrument of the €750 billion recovery package negotiated by EU leaders at their meeting on 17-21 July.
The aim of the facility is to provide large-scale financial support for reforms and investments undertaken by member states, to mitigate the economic and social impact of the COVID-19 pandemic and to make the EU economies more sustainable, resilient and better prepared for the challenges posed by the green and digital transitions. It would offer a mix of grants (€312.5 billion) and loans (€360 billion) to member states.
The proposal for a regulation establishing this instrument has been discussed intensively within the Council during the past few months. Ministers exchanged views on the outstanding issues, including governance, control systems and the challenges to be addressed in the recovery and resilience plans to be submitted by member states with a view to receiving RRF support.
The political agreement reached today will be formalised by the Permanent Representatives Committee as a mandate for negotiations with the European Parliament. The Council's position will guide the presidency in negotiations with the Parliament, which the presidency aims to conclude as soon as possible.
As the presidency we are very pleased that we reached an agreement on the Recovery and Resilience Facility among the member states today. We are on track. The facility lies at the heart of our efforts to tackle the fall-out of the COVID-19 crisis. It will help member states recover from the crisis while investing in the green and digital transitions and preparing their economies for the future. We hope that we will be able to conclude the legislative process with the Parliament as soon as possible. There is no time to lose.
Olaf Scholz, Germany’s Federal Minister of Finance and Vice Chancellor
Digital finance
Ministers exchanged views on the digital finance package presented by the Commission, comprising:
- digital finance and retail payments strategies
- legislative proposals on crypto-assets and digital operational resilience of the financial sector
The package aims to boost Europe's competitiveness and innovation in the financial sector, giving consumers more choice in financial services and modern payment solutions, while ensuring consumer protection and financial stability.
In their discussion, ministers focused on the field of retail payments, where substantial improvements have been made in recent years, but the EU market is still fragmented and largely reliant on large global players. They signalled their broad support for the package, including the retail payment strategy presented by the Commission, and stressed the importance of striving for a strong and sovereign Europe in digital finance.
The presidency highlighted its intention to work intensively on the legislative proposals on crypto-assets and operational resilience to achieve as much progress as possible on these files.
Capital markets union
The Commission also presented its communication on a new action plan on the Capital Markets Union (CMU). This was followed by an exchange of views among ministers.
The Commission's action plan has three key objectives:
- ensuring that the EU's economic recovery is green, digital, inclusive and resilient by making financing more accessible for EU companies, in particular SMEs
- making the EU an even safer place for individuals to save and invest in the long term
- integrating national capital markets into a genuine EU-wide single market for capital
The Commission put forward 16 targeted measures to achieve these objectives and make real progress towards completing the CMU.
Ministers outlined their overall assessment of the renewed action plan, including their priorities as regards the principles and measures mentioned in the Commission's communication. Their exchange of views will feed into the preparation of Council conclusions on the CMU, which the presidency aims to adopt in December.
European Semester
Ministers held an exchange of views on lessons learned from the European Semester 2020 and ways forward in the context of the recovery from the COVID-19 crisis. The discussion focused on the forward-looking elements of the European Semester process, including the changes that will be introduced in the forthcoming exercise in view of the introduction of the Recovery and Resilience Facility in 2021.
Other items
The presidency informed ministers about the progress achieved on the current financial services legislative proposals. Among other things, the presidency highlighted the Capital Markets Recovery Package, which will help to support a quick economic recovery, and the review of the Benchmark Regulation, which will allow EU regulators to address the potential discontinuation of relevant benchmarks in the EU or in third countries and thus protect financial stability.
The presidency also informed ministers about the next steps following the Eurogroup's support for the candidacy of Frank Elderson to become the new member of the European Central Bank's Executive Board. The Council recommendation on the appointment of Mr Elderson will be adopted by written procedure, followed by the final appointment of the new member by the European Council after it has consulted the European Parliament and the ECB's Governing Council.
Ministers also took stock of preparations for the G20 finance ministers' and central bank governors' meeting on 14 October and the International Monetary and Financial Committee (IMFC) annual meeting on 15 and 16 October, as well as the outcome of the call for nominations for a European candidate for the election of the IMFC chair.