The Chancellor of the Exchequer (Mr George Osborne)
The Economic and Financial Affairs Council will be held in Brussels on 8 November 2011. The Chancellor will attend. The following items will be discussed:
Financial Transaction Taxes (FTTs)
The Commission will present its proposal on FTTs and ask for preliminary comments from member states. The tax would be levied on all transactions in financial instruments by financial institutions when at least one party to the transaction is located in the EU. Trading in shares, bonds and money market instruments would be taxed at a rate of 0.1% and derivative contracts at a rate of 0.01% on the notional value of the transaction. The Government do not support the Commission’s proposal; as it stands, it would have significant negative impacts on jobs and growth. I will continue to make clear that, to avoid relocation of trading, any FTT would need to apply in all financial centres (that is, not just the EU).
Energy Taxation Directive (ETD)
Depending on progress at officials’ level, Finance Ministers will hold an orientation debate on the ETD. The Commission published its proposal on this issue in April. Its stated aim is to bring EU rules on the taxation of energy products further into line with the EU’s energy and climate change objectives. The proposal would require member states to tax energy products by taking into account both CO2 emissions and energy content. The Government believe that revision of the ETD should focus on reviewing EU minimum levels of taxation, and do not support a mandatory EU-level carbon tax. In line with the principle of subsidiarity, member states should also retain the absolute right to set national duty rates on different types of energy products, as long as these are above EU-wide minimum rates of taxation. The presidency has drafted “orientations” to guide future work on the file, which are in line with the Government’s priorities in this area.
Follow-up to the October European Council, 23 October
ECOFIN will discuss the outcomes of the European Council, where leaders discussed the immediate challenges posed by the financial crisis, and agreed on measures to secure sustainable and job-creating growth. They also set the EU’s position for the G20 summit, giving top priority to maintaining financial stability and restoring growth, and discussed preparations for the Durban conference on climate change.
Follow-up to the G20 summit, 3-4 November in Cannes
The presidency will report on the G20 leaders’ summit held in Cannes on 3-4 November. The Council will discuss the outcomes from the summit, including: the
global economy and international monetary system; financial regulation; energy commodities and agriculture; and development. The session is also expected to look ahead to the Mexican presidency of the G20 in 2012, including where additional work is required in the G20 and EU to make further progress.
Financial assistance to Greece—disbursement of next instalment
Given the current situation in Greece, it is unlikely that this will remain on the ECOFIN agenda. After the referendum announcement, euro area countries and the IMF made clear they would not disburse the next instalment of the Greek financial assistance programme, which euro area countries had informally agreed to disburse on 26 October. While the referendum now seems to be off the table, the situation in Greece is still fluid, and euro area countries might want to hold off disbursement until Greece is able to commit to the second financial assistance programme also agreed on 26 October. The UK Government will not be part of any decision on the disbursement. However, it is extremely important for the euro area to implement the comprehensive package agreed on 26 October, and that the other elements are not delayed as a consequence of the situation in Greece.
Economic governance—surveillance of macro-economic imbalances: design of the “scoreboard”
The Council will discuss draft Council conclusions on a scoreboard for assessing macro-economic imbalances. The scoreboard will be a new monitoring mechanism under the excessive imbalances procedure, and a key part of a more effective European semester. The Government support measures designed to help restore and maintain macro-economic stability in the EU.
Preparation of the 17th Conference of Parties (COP-17) of the United Nations Framework Convention on Climate Change (UNFCCC) in Durban, South Africa
ECOFIN will discuss draft climate finance conclusions which endorse the EU’s “fast start finance report” setting out the EU’s contributions in 2011. The conclusions will also consider the report to the G20 on long-term sources of finance, which was led by the World Bank. The Government support the further development of the EU’s position in advance of the UNFCCC negotiations in Durban.
Annual Meeting of EU and European Free Trade Association (EFTA) Economy and Finance Ministers
This meeting will take place over breakfast, before the formal ECOFIN begins. It will focus on improving regulation in order to secure financial stability, where the Government’s priority is to have robust, internationally consistent regulatory standards that will benefit the economy in the long run. It will also be an opportunity to exchange views on respective strategies in the current macro-economic environment in Europe, where the Government believe the priority is to achieve fiscal consolidation and lay the foundations for growth.