ECOFIN

Greg Clark Excerpts

Tuesday 2nd July 2013 Written Statements

[The Financial Secretary to the Treasury (Greg Clark)]

A meeting of the Economic and Financial Affairs Council was held in Luxembourg on 21 June 2013 and in Brussels on 26 June 2013.

At the meeting on 26 June Ministers discussed the following items:

Contribution to the European Council meeting on 27-28 June 2013—European semester 2013

Council approved the fiscal and economic elements of country specific recommendations (CSRs) for 23 member states and also a recommendation on the economic policies for the euro area as a whole. The UK’s CSRs are broadly in line with domestic reform priorities. The Council recommendations are non-binding and there are no sanctions for non-compliance. Additionally, Council approved Council conclusions on Croatia, which joined the EU on 1 July.

Implementation of the stability and growth pact

Council adopted 15 Council decisions and recommendations on the excessive deficit procedure.

Commission/European Investment Bank (EIB) report to the European Council

The Commission/EIB presented their joint report “Increasing lending to the economy: implementing the EIB capital increase and joint Commission-EIB initiatives”. The Commission/EIB then reported to the June European Council on the implementation of the EIB’s capital increase.

Financial assistance to Ireland and Portugal

Council adopted two Council implementing decisions amending previous implementing decisions on granting Union financial assistance to Ireland and Portugal.

ECB/Commission convergence reports and enlargement of the euro area

Euro area member states adopted a recommendation in favour of a proposal to allow Latvia to join the currency union on 1 January 2014. The UK does not have a vote on the decision by EU member states to adopt the euro. Council also approved the text of a letter for the President of the Council to send to the European Council on the outcome of its discussion.

Development of policy options in the climate/energy field—follow-up to the May European Council

Following May European Council, at the request of Poland, there was a brief exchange of views on an enhanced role for ECOFIN in the debate on climate change and energy policy, as they are integral to growth, competitiveness and public finances. The presidency concluded that it would reflect with the incoming Lithuanian presidency, on the next steps for taking this forward.

ECOFIN report to the European Council on tax issues

ECOFIN endorsed this six-monthly report which ECOFIN forwards on to the European Council, summarising the progress made under each presidency on tax issues.

Report by Finance Ministers on tax issues in the framework of the euro-plus pact

ECOFIN endorsed this six-monthly report which summarises progress made under each presidency on tax issues in relation to framework of the euro-plus pact.

Proposal for a Council directive amending directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation

The Commission presented a proposal on amending the existing administrative co-operation directive. The UK could not support any aspects of the proposal that conflict with or undermine the embedding of a new global standard in the automatic exchange of information. The presidency concluded by noting that the working group will start technical work on this in July.

Banking recovery and resolution

Council held an exchange of views, with the aim of enabling the presidency to find an acceptable compromise on the banking resolution and recovery directive. However, the Council agreed to meet again on 26 June 2013 to resume discussion.

AOB: Update on legislative files

The presidency updated Ministers on the state of play of the deposit guarantee schemes directive.

At the meeting on 26 June 2013 Ministers discussed the following item:

Banking recovery and resolution

Council reached a general approach on the banking recovery and resolution directive. The compromise establishes that, through the development of a credible bail-in tool, shareholders and creditors will be first in line to bear losses when a bank fails. Insured depositors will be protected in any bank failure and the UK bank levy can act as the UK’s resolution financing arrangement. Trilogue discussions with the European Parliament and the Commission, yet to be timetabled, will commence under the Lithuanian presidency.