Brussels, 09/11/2012 (Agence Europe) - The Ecofin Council will be examining financial and budget issues to be agreed upon later this year, along with the new financial transactions tax (FTT).
Bank supervision. Ministers will discuss draft legislation to introduce a common eurozone bank supervision system under the aegis of the European Central Bank (see EUROPE 10714). There is agreement on the idea, but exactly how non-euro and eurozone nations are to be treated equally at the Supervision Committee responsible for bank supervision at the ECB is a tricky legal question. How can it be guaranteed that non-euro countries have genuine decision-making power on the committee while under the EU treaties, only the ECB's Governing Council and Executive Board have the power to take decisions for the eurozone? At the end of last month, the Cypriot Presidency suggested that decisions taken by the soon-to-be-created Supervision Committee should be seen as preliminary and only deemed to have been passed if the Governing Council does not reject them within three weeks. The Governing Council would have to explain in writing the reasons for any objection it makes and would not be allowed to amend any draft decisions of the Supervision Committee. The question of implicit agreements will be discussed and a diplomat explained that there was general desire to reach agreement this year. The procedure suggested by the Cypriot Presidency is disliked by Poland, the Czech Republic and Sweden, three countries which are expected to join the bank supervisory scheme at some point. Germany has suggested that the Governing Council should delegate powers to the Supervision Committee, but the Council of Ministers' legal department says this would not be workable from a legal point of view. The problem is so difficult to solve that Germany and Finland say that the legal basis underlying the new legislation (Article 11.6 of the EU treaty) should be changed to ensure a proper separation between monetary policy and bank supervision at the ECB.
The question remains open about voting at the European Banking Authority (EBA) now that the ECB will supervise banks in the eurozone. A solution is needed because the EBA will be required to settle any disputes among bank supervisory bodies, possibly on ad hoc supervisory panels. The United Kingdom wants the procedures for EBA endorsement of regulations to be changed.
CRD IV. Ministers will take note of the inter-institutional talks on improving the quality and quantity of bank capital requirements (the CRD IV package) (see EUROPE 10707). The Cypriot Presidency handed out a new draft compromise on Friday that covers bank bonuses as well, ahead of a three-way meeting on Monday. Diplomats say that there was now quite a clear idea about how the new rules would be structured. On the technical front, work is continuing on the recognition of national measures that have proven successful for financing the real economy. Questions that still need to be settled include the degree of flexibility for member states to go beyond the EU capital requirements in the form of capital buffers and liquidity rations.
“Two-pack.” The Council of Ministers says that inter-institutional agreement on the “two-pack” of legislation to amend the Stability and Growth Pact is within reach (see EUROPE 10716). On the analysis of draft member state budgets ahead of approval, reference will simply be made to budget solidarity instruments (treasury bills and redemption funds) that could be considered in an integrated budget union.
FTT. Ministers will examine progress on the FTT that 11 member states (possibly along with the Netherlands) are planning to introduce by means of enhanced cooperation (see EUROPE 10711). Discussions will focus on exactly how this enhanced cooperation will be approved, but no qualified majority vote is expected on the matter on Tuesday. Ministers will discuss the Commission's draft decision to allow the FTT enhanced cooperation (see EUROPE 10716), on which the European Parliament is expected to express its views before the end of the year. In mid-December, the Commission will publish new draft FTT legislation based on the September 2011 initial draft amended by the EU27 at technical level. Participating countries will have to adopt the proposal unanimously. Non-participating countries have called for an impact assessment of the FTT on the single market before they will go along with the launch of enhanced cooperation.
Savings tax. The Council of Ministers will examine the draft mandate for the Commission for amending the EU savings tax agreements signed in 2004 with Switzerland, Liechtenstein, Monaco, Andorra and San Marino. The proposal must be voted upon unanimously at the Council of Ministers, but Austria and Luxembourg still oppose it. Like Switzerland, these two countries tax savings at source and want the five non-EU countries in question to apply equivalent measures to the EU's savings tax directive (automatic exchange of information - meaning that bank accounts lose their anonymity) before they will agree to change their own savings tax rules.
Ministers will issue a conclusions document on updating the state aid policy and the financing of the effort to tackle the impact of climate change in developing countries, for which the EU is giving €7.1 billion for 2010-2012. (MB, FG/transl.fl)