ECOFIN

George Osborne Excerpts

Thursday 21st June 2012 Written Statements

[The Chancellor of the Exchequer (Mr George Osborne)]

A meeting of the Economic and Financial Affairs Council will be held in Luxembourg on 22 June 2012. The following items are on the agenda to be discussed:

Recovery and Resolution of Credit Institutions and Investment Firms Directive

The Commission will present its new proposals for a directive, following which the Council may then have a preliminary exchange of views on the proposal. The directive will require member states to ensure that their national supervisory and resolution authorities have a set of common tools and powers which will enable them to avert, and where necessary manage, the failure of a financial institution. The proposal seeks to prevent the systemic damage caused by the disorderly failure of such institutions, limiting public sector exposure and preventing wider economic damage.

Contribution to the European Council Meeting on 28-29 June 2012, European Semester

The Council will be asked to approve the fiscal and economic elements of the country specific recommendations (CSRs) for the 27 member states and the Euro area. For the UK, as happened last year, the UK has received CSRs in the areas of public finances; housing; workless households and access to finance, with an additional recommendation on infrastructure. The recommendations are in line with domestic reform priorities and messages given to the UK by the IMF and the OECD. For the UK, the recommendations are non-binding and there are no sanctions for non-compliance.

Implementation of the Stability and Growth Pact

The Council will be asked to adopt the Council decision abrogating the excessive deficit procedures for Germany and Bulgaria. The Council will also be invited to take a decision to lift the suspension of the commitments from the cohesion fund for Hungary. The latter decision will be based on a proposal from the Commission concerning the assessment of effective actions taken by Hungary in order to bring the situation of an excessive Government deficit to an end. The UK agrees with the Commission assessment that the necessary progress has been made in both cases and will support the proposed decisions.

Convergence Report from the Commission and the ECB

The Commission and the ECB will provide an update on their assessment of the progress made by Bulgaria, the Czech Republic, Latvia, Lithuania, Hungary, Poland, Romania and Sweden in fulfilling their obligations regarding the achievement of economic and monetary union. There are no policy implications for the UK.

Follow up to the G20 Summit (Mexico, 18-19 June 2012)

The Commission will provide a read-out of the G20 summit in Los Cabos that occurred on 18 and 19 June.

Financial Transactions Tax

The presidency will update the Ministers on their assessment of discussions so far on the proposals for a financial transactions tax. The Council will be invited to discuss orientations for future work on this dossier. The Chancellor has made clear on a number of occasions that the UK does not support the Commission’s proposal for an FTT. As it stands, the proposal will have significant negative impacts on jobs and growth across the EU. To avoid a damaging relocation of financial trading, FTTs would need to apply in all financial centres, and not just the EU.

Energy Taxation Directive

The presidency will update Ministers on progress on this directive and will ask the Council to discuss orientations for future work. The UK opposes several elements of the revision proposal and supports the approach of the current energy taxation directive where EU minimum rates are established but it is then for member states to determine the structure of their national taxes.

ECOFIN Breakfast

Eurogroup will meet on 21 June. Ministers will be debriefed on the Eurogroup discussions before the formal ECOFIN starts on the 22nd. Ministers are likely to discuss the current economic situation, the most recent trends on sovereign debt markets and proposals to strength the single currency.

ECOFIN Lunch

The multiannual financial framework will be discussed based on a presidency issues note negotiations on the MFF have progressed under the Danish presidency, which is working to present a “negotiating box” at the June European Council setting out the options member states have discussed. There remain a number of options in the negotiating box which are unacceptable to the UK, such as a change to our abatement and the introduction of new EU taxes to fund the EU budget. We will strongly defend the abatement and oppose new EU taxes to fund the EU budget. The maximum acceptable increase in spending in the next MFF is a real terms freeze in payments on current levels of actual spend.