Foreign Affairs Council/General Affairs Council

(Limited Text - Ministerial Extracts only)

Tuesday 15th October 2013 Written Statements

[The Minister for Europe (Mr David Lidington)]

The 30 September General Affairs Council (GAC) focused on cohesion policy and the preparation for the 24-25 October European Council. I also provided the Ministers of the GAC with an update on the work we are doing on our balance of competences exercise.

Cohesion Policy

The GAC discussed a key issues paper that was prepared by the presidency. This paper focused on outstanding areas of disagreement with the European Parliament on the cohesion policy legislative package for 2014-20. This paper raised four main issues: macro-economic conditionality; the performance reserve; co-financing; and pre-financing.

On macro-economic conditionality I restated that the UK’s opt-out from sanctions for macro-economic conditionality agreed in the February European Council must be preserved. I also highlighted that the European Parliament should not have a role in decisions linked to economic governance beyond the economic dialogue that has already been established, even where as with macro-economic conditionality these decisions do not apply to the UK.

The performance reserve is intended to reward good performance when using cohesion funding and ensure that these funds are spent as effectively as possible. The focus of discussion was over the percentage of the funds allocated to the performance reserve. I maintained that any agreement must respect the ceilings agreed at the February European Council and emphasised the importance of agreeing rules that improved the efficiency and transparency of EU spending.

Likewise, co-financing rates underpin the effective use of structural funds. I argued that this purpose should not be diluted unnecessarily and that any changes to the co-financing rates should not alter the ceilings of expenditure agreed in February.

Initial pre-financing addresses cash-flow issues by providing a proportion of spending at the start of programmes. Here I raised our concern that the proposals could increase the levels of reste á liquider (build up of unspent commitments), which create uncertainty in the future levels of spending.

Preparation of the October European Council

The GAC discussed the draft annotated European Council agenda in preparation for the 24 and 25 October Heads of State and Government meeting. The agenda covers the digital single market; better regulation, including an update from the European Commission on regulatory fitness (REFIT); services liberalisation; innovation; an update on latest developments on economic and monetary union; and an open item for discussion on the current foreign policy at the time of the European Council.

I strongly supported the pro-growth agenda set for the October European Council. I highlighted that e-commerce, copyright, e-payment and big data, building on the G8 open data charter, are areas where particular priority should be given to achieve the greatest impact.

I also highlighted the need to continue the work to reduce the regulatory burdens on businesses. A number of UK businesses were conducting a review on the top 10 most burdensome EU regulations. I underlined that it would be important to listen to what business had to say.

Balance of Competences

I briefed the GAC on the six first semester reports of the balance of competences review. The intention of this review is to provide a mechanism for objective analysis based on evidence from a wide range of sources, rather than to recommend policy outcomes. The first six reports show there were clearly areas where the EU plays a positive role, but that there are also areas where changes could be made to make the EU work better.