On Tuesday 11 October, the European finance ministers will discuss the negotiations currently underway on the proposed directive for the protection of the financial interests of the EU against fraud. In the banking field, they will take stock of the finalisation of the reform of Basel III and completion of banking union in the eurozone.
Although they are not taking the lead on this dossier, the finance ministers will hold an exchange of views on the inter-institutional negotiations on the proposed directive on the protection of the financial interests of the EU (PFI), which aims to harmonise criminal sanctions in the framework of infringements against the own resources of the EU. As the members of the European Parliament would like to include VAT fraud in the scope of the PFI directive, the Slovak Presidency of the Council will sound the ministers out on the possibility. Germany, in particular, has a few issues. France is reported not to be opposed to the move if the aim is to tackle serious fraud, such as carousel fraud. However, a number of member states are still opposed, particularly for reasons of subsidiarity, as protection mechanisms are set in place at national level. Ireland has criticised the fact that taxation issues are included in texts not subject to the rule of unanimity.
Still on the fiscal field, the ministers will adopt conclusions on tax transparency, in which they will encourage work at European level to protect whistleblowers (see EUROPE 11639). They will also approve the conclusion of an agreement with the Principality of Monaco on the exchange of information on private savings.
Climate. In the conclusions they will adopt on Tuesday, the ministers will reiterate their commitment to build up the private and public resources to be mobilised to contribute to the hundred billion euros a year pledged by 2020 to support the efforts of the developing countries. These conclusions will not, however, include the nominal aggregated level of the national contributions, as some of the large countries have not yet announced their national contributions, a diplomat lamented.
Banking sector. The Commission will report back to the ministers on the negotiations underway within the Basel Committee on the finalisation of the Basel III reform on banks' own funds requirements (see EUROPE 11640). There is genuine concern on the scale of the reform and the range of effects it may have on the jurisdictions involved, the same source said, adding that the texts on the table would lead to an increase of around 25% in the optimum-quality capital European banks must hold, whilst the requirements would remain the same for American banks, and even fall for Chinese banks. For instance, French concerns focus on the potential treatment of bank loans related to real estate.
The ministers will take stock of the completion of banking union in the eurozone. Belgium is the last member state that has still not fully transposed the BRRD directive (2014/59) on bank recovery and resolution and DGS directive (2014/49) on the national deposit guarantee schemes (see EUROPE 11639). This situation is holding up the start of talks on the backstop of the Single Resolution Fund. As regards the creation of the European deposit insurance scheme (EDIS), technical work continues. Until the Commission has presented its package to revise the banking prudential rules to reduce financial risks (revision of the CRD/CRR package, inclusion of the G20's TLAC standard, setting leverage and liquidity ratios), as it is expected to do in November or December, no major breakthroughs are anticipated with this dossier.
Over breakfast, the ministers will hear from the Commission on the structural dialogue it is conducting with the Parliament on the question of the possible suspension of structural funds to Spain and Portugal, which failed to respect their budgetary commitments (see EUROPE 11638). The European Parliament would like to hear from the Spanish and Portuguese ministers at some point in October. Additionally, the ministers will discuss the legislative proposal to set in place an investment support mechanism in the countries of origin of the migrants, similar to the EFSI fund of the Juncker investment plan (see EUROPE 11567).
Greece. On Monday, the Eurogroup will assess Greece's implementation of the 15 prior actions required for the disbursement of the second sub-tranche of €2.8 billion in the framework of the first monitoring mission of the third Greek bailout plan (see EUROPE 11636). On the sidelines of the autumn meetings of the IMF and of the World Bank in Washington, the creditors of Athens once again clashed, on Friday 7 October, over the question of the viability of the Greek debt. The IMF has made this an absolute condition for it to come on board the aid plan, whilst the European side is in no hurry to relieve the Greek debt. (Original version in French by Mathieu Bion)