The Chancellor of the Exchequer (Mr George Osborne)
The Economic and Financial Affairs Council was held in Brussels on 12 July 2011. The following items were discussed:
Bank stress tests
The Council held an exchange of views on the European Banking Authority (EBA) stress tests. It adopted a statement and agreed a communication strategy on backstop measures to address potential vulnerabilities in member states’ banking systems. I emphasised the importance of credible backstops, and of implementing Basel III in full. On 15 July, the EBA published results in aggregate format, while national supervisory authorities published results on individual banking institutions. At the time of publication, Ministers planned to issue statements, based on a common template, on remedial and backstop measures.
Stability and Growth Pact
a. Closure of Finland’s excessive deficit procedure
The Council adopted a decision closing the excessive deficit procedure for Finland, given that its deficit for 2010 remained below 3% of GDP.
b. Implications of the economic situation for fiscal surveillance
The Council adopted conclusions which reinforced recommendations made in relation to the European semester and excessive deficit procedure. The Government welcome the conclusions, and their emphasis on ensuring that all member states fully implement budgetary strategies for timely meeting of fiscal targets. The Council will re-examine the situation after the summer, on the basis of an updated assessment prepared by the Commission.
Presentation of the Polish presidency work programme
The Council took note of the Polish presidency’s ECOFIN work programme for the second half of 2011.
Follow up to the G20 Deputies meeting in Paris on 8-9 July 2011
Finance Ministers took note of the meeting of G20 Deputies. It agreed that Ministers would prepare, at the informal ECOFIN in September, terms of reference for the meeting in Washington on 23 September of G20 Finance Ministers and central bank governors.
Follow-up to the June European Council on 24 June 2011
The presidency summarised discussion on economic policy issues at the European Council. On the economic governance legislative package, the presidency would continue to liaise with the European Parliament and come back to the Council for further discussion after the summer. With reference to the euro-plus pact, the European Council would consider progress on the commitments made by signatories in December. The UK is not a member of the euro-plus pact.
Savings Taxation Directive
The Commission gave a presentation on its recommendation for a Council decision authorising it to negotiate changes with Liechtenstein, Monaco, San Marino, Andorra and Switzerland on the taxation of savings income. The Council agreed that the mandate should be further examined at working group level, and progress reported back to ECOFIN as soon as possible. The UK is keen to progress this dossier, and welcomes further commitments at Council.
11th Facility for Euro-Mediterranean Investment and Partnership (FEMIP) ministerial meeting
Ministers held a joint lunch meeting with their counterparts from the EU’s Mediterranean partner countries to discussion implementation of FEMIP.