Brussels, 08/05/2015 (Agence Europe) - On Tuesday 12 May, the Ecofin Council will assess progress in the inter-institutional talks on the creation of a European Fund for Strategic Investments (EFSI), the financial arm of the Juncker investment plan.
Three inter-institutional talks have taken place since the Council and European Parliament adopted their negotiating positions for the regulation to set up the EFSI (see EUROPE 11271 and 11298), the latest one on Thursday 7 May. All issues have been addressed apart from measures on transparency and responsibility to democratic bodies, according to a document produced by the Latvian presidency of the Council of the EU. At this stage, each party is sticking to its guns. After a public debate on Tuesday, the ministers are not expected to grant Latvia any new negotiating mandates and the Presidency is not planning to request any for that matter.
Among the most controversial aspects of the draft legislation is the question of how the EFSI's €16 billion guarantee from the EU budget is to be set up. The Council is categorically refusing to make use of any other budget lines than those suggested by the European Commission, namely the Horizon 2020 research programme and the Connecting Europe programme. A diplomat said that if the money weren't taken from these budget lines, then it would be taken from somewhere else and it isn't possible to improve on the current setup since the budget for Horizon 2020 is 70% larger under this Multiannual Financial Framework than under the previous one. The Council doubts that the EP's request to make annual decisions about the public guarantee is compatible with the EU treaty.
The member states and MEPs also clash over governance and the EFSI's investment policy. The EP wants the right to scrutinise the appointment of the EFSI's managing director. The MEPs want the EFSI's investment policy guidelines to be validated in delegated act legislation, for which the EP and Council have equivalent decision-making powers.
Three trialogue negotiating meetings are scheduled for 12, 18 and 27 May with the aim of reaching political agreement by the end of the month or, failing that, in June, so the EFSI can come on stream in the autumn.
European Semester. Under the European Semester budget process, the ministers will adopt a conclusions document on detailed assessments for the member states. They will ask the European Commission to ensure better targeting and a hierarchy of recommendations and will call for stronger management of the procedure for macroeconomic imbalances.
Based on the national stability and reform plans that the member states submitted at the end of April, the European Commission is expected to adopt the country-specific recommendations the next day, in which it gives its view of countries' economic and budget policies (see EUROPE 11308).
This year, as every three years, the Council will endorse a report on ageing and its impact on national public finances in terms of pensions, healthcare and welfare spending.
Taxation. The review of the interest and dividends directive has been removed from the agenda of the Ecofin Council. The Latvian Presidency wants to divide the subject in two and reach agreement on the anti-abuse clause, but France, Italy, Germany and the Czech Republic oppose this because they want actual taxation to be taken into account (see EUROPE 11299 and 11303). The Latvian Presidency's suggested compromise states that it would be clearly indicated in the agreement on the anti-abuse rule that the talks would continue on the question of actual taxation levels was clearly not enough to win the countries over. One delegation says that a harmonisation of this type is not possible, but France says that it is not a question of harmonisation or ideology, but rather of putting on paper the fact that there must not be double non-payment of tax. The anti-abuse clause is considered very weak. Technical discussions early next month will look into this. The draft legislation will be on the agenda of the June Ecofin Council although broad agreement is far from certain at that date. (Mathieu Bion and Elodie Lamer)