The Chancellor of the Exchequer (Mr Philip Hammond)
A meeting of The Economic and Financial Affairs Council (ECOFIN) was held in Luxembourg, on 16 June 2017. EU Finance Ministers discussed the following items:
Early morning session
The Eurogroup President briefed ministers on the outcomes of the 15 June meeting of the Eurogroup, where consensus was reached on a short-term solution for Greek debt re-structuring and fiscal targets. Commissioner Moscovici also gave a presentation on the euro, area economy in which he flagged the ongoing political risks faced by the euro area.
Reduced VAT rate for electronically supplied publications (e-Publications)
The Council discussed the proposal for a Council directive amending the VAT directive as regards VAT rates applied to books, newspapers and periodicals. The proposal could not be adopted due to the lack of unanimous agreement. The incoming presidency will decide on the further handling of this file.
General reverse charge mechanism
The Council were invited to reach a general approach on the proposal for a general reverse, charge mechanism which will allow member states to shift liability for VAT payments from the supplier to the customer, under certain conditions. The proposal could not be adopted due to the lack of unanimous agreement. The incoming presidency will decide on the further handling of this file.
Strengthening of the Banking Union/Risk-reduction measures
Under this item, the Council agreed the general approach on a proposal for a directive amending the bank recovery and resolution directive (BRRD) as regards the ranking of unsecured debt instruments in insolvency hierarchy. General approach was also agreed on the proposal for a regulation amending the capital requirements regulation (CRR) as regards the transitional period for mitigating the impact on own funds of the introduction of International Financial Reporting Standards (IFRS) 9 and the large exposures treatment of certain public sector exposures denominated in non-domestic currencies of member states. The presidency also presented a progress report on the capital requirements regulation, the capital requirements directive, the banking recovery and resolution directive, the single mechanism regulation, and the European deposit and insurance scheme.
Current financial services legislative proposals
The presidency informed Council of the state of play of legislative proposals in the field of financial services.
Non-Performing Loans (NPLs)
The presidency gave an update on the work of the Financial Services Committee’s sub-group on NPLs. The sub-group’s report on NPLs will be presented to July ECOFIN.
Fight against the financing of terrorism (Commission Action Plan)
The Commission provided an update to Council on implementation of the action plan on the prevention of terrorist financing, including progress to agree revisions to the fourth anti-money laundering directive.
Capital Markets Union (CMU): Mid-term review
The Council received a presentation from the Commission on the mid-term review of the CMU action plan, published on 8 June.
Contribution to the European Council meeting on 22-23 June 2017: European semester 2017
The Council approved draft country-specific recommendations (CSRs) on the economic and fiscal policies of member states. These will be submitted to the June European Council for endorsement.
Implementation of the stability and growth pact
The Council adopted Council decisions and recommendations in the context of the excessive deficit procedure, closing the excessive deficit procedures of Croatia and Portugal, and the significant deviation procedure, recommending Romania correct a significant deviation from the adjustment path towards its medium-term budgetary objective.
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