The European Finance Ministers will discuss, on Tuesday 24 May in Brussels, macro-financial assistance to Ukraine, which is in the grip of the Russian invasion, the implementation of the Next Generation EU Recovery Plan and the Directive transposing the OECD agreement on minimum taxation of multinationals in the European Union.
Concerning Ukraine, the ministerial discussions will be based on the recent proposal of the European Commission to provide further macro-financial assistance of €9 billion in the form of long maturity loans at preferential rates (see EUROPE 12955/2). Ukraine’s monthly needs are estimated at $5-6 billion.
If no agreement is expected on Tuesday, the discussion will serve to verify that Member States agree to continue helping Ukraine pay its civil servants and run its public services, an EU source said on Thursday 19 May.
On Friday, the G7 countries pledged $19.8 billion in budget support for 2022 (see other news). Germany, which currently holds the G7 presidency, has voiced its opposition to a European debt pool to support Ukraine, along the lines of the Next Generation EU Recovery Plan.
On Tuesday, Ecofin Council will also take stock of the implementation of EU sanctions already adopted against Russia and Belarus as Member States struggle to adopt a sixth package of measures including a progressive embargo on Russian oil (see EUROPE 12949/15).
Minimum taxation. On Tuesday, the EU Council will again discuss the directive aimed at transposing into the EU, the Pillar II of the OECD agreement reforming the taxation of large companies.
A unanimous agreement by Member States on the text may not be reached on Tuesday, despite the European Parliament’s call for its swift integration (see EUROPE 12956/10).
“Everything is ready, Poland is still blocking. It’s more of a political problem than a technical one”, an EU diplomat said on Thursday.
Poland, which would make its decision dependent on the approval of its recovery plan, has been insisting for several months on the link between Pillar II of the OECD agreement, which is transposed into the directive, and Pillar I, which is the subject of an international convention still being negotiated at international level.
“All possible guarantees have been given. We have the same agenda ambitions for both pillars. We are working on both in parallel”, a second diplomat said on Thursday. “If a difficulty persists, it could create debates that complicate the international discussions around Pillar I”, he added.
“The French Presidency wants to put political pressure on Poland. It is not very happy with the way things are going”, said the first diplomat.
Despite the risk of not reaching a final decision in May, diplomats expressed confidence that a solution would be found in June, before the end of the French Presidency.
ELTIFs. On Tuesday, the EU Council will reach a political agreement in principle (‘general approach’) on the revision of the rules governing European Long-Term Investment Funds (ELTIFs).
The legislative proposal aims to foster long-term investment by mobilising citizens’ savings to transform the EU economy, as part of the capital markets union.
“We have worked a lot on it, the general approach should be adopted without debate”, a top EU diplomat said on Thursday.
On Wednesday 11 May, MEPs had discussed the amendment of the ELTIF regulation (2015/760) (see EUROPE 12951/23).
NGEU. In addition, the ministers will discuss the implementation of the Next Generation EU Recovery Plan.
Following the green light given to the Bulgarian and Swedish plans in early May (see EUROPE 12944/29), the EU Council has now adopted 24 national recovery plans, with the Hungarian, Dutch and Polish plans still missing. Several countries have requested and received the payment of first tranches of aid.
On the Polish side, bringing Polish legislation governing the judicial system into line with European case law could unblock negotiations between the Commission and Warsaw in the short term (see other news).
Commission guidelines are also expected on how to revise the 30% of the European Recovery Plan budget envelope by June (see EUROPE 12953/23). As some countries will either gain or lose budgetary allocations, these variations will have an impact on the content of the national plans.
On Tuesday, ministers may also react to the Commission’s recent proposal to amend the regulation establishing the Recovery and Resilience Facility, the budgetary instrument at the heart of the Next Generation EU, in order to mobilise around €200 billion of unused loans to reduce the EU’s energy dependence on Russian hydrocarbons (see EUROPE 12955/4).
Customs. On Tuesday, the European Commission will inform ministers of the report of the Wise Persons Group on Challenges Facing the Customs Union, which is calling for the creation of a European Customs Agency (see EUROPE 12923/13).
The report identifies ten recommendations to enable European customs to meet the challenges regarding an ever-changing global trade.
G20 ’Finance’ meeting. Finally, the ministers will be informed of the outcome of the G20 Finance meeting (see EUROPE 12936/11). (Original version in French by Mathieu Bion and Anne Damiani)