On Tuesday 8 October in Luxembourg, the European Finance Ministers will discuss the European Union’s continued financial support for Ukraine, the implementation of the post-Covid-19 Next Generation EU Recovery Plan and the issue of third countries that are uncooperative over tax.
Ukraine. On aid to Ukraine, the ministers will be informed of the progress of discussions in the EU Council on the creation of a new macrofinancial assistance ‘MFA’ of up to €35 billion, as a European contribution to the decision by the G7 countries to grant loans to Kyiv against the future profits generated by the Bank of Russia’s assets tied up in the EU (see EUROPE 13487/1).
On the basis of the comments received at the Ecofin Council, the aim of the Hungarian Presidency of the Council of the EU is to reach an agreement by a qualified majority of Member States at the meeting of Member States’ ambassadors to the EU on Wednesday 9 October. “We plan to finalise the discussions and reach a decision next week”, confirmed a diplomatic source on Friday 4 October. With a vote scheduled for the end of October in the European Parliament, the EU’s macro-financial aid should be finalised by the end of the month, with a view to making the first disbursements in early 2025.
To see the proposal to set up the ‘Ukraine Loan Cooperation Mechanism’ (ULCM) to help Ukraine repay bilateral loans taken out with the EU and G7 countries, go to https://aeur.eu/f/dk1
On the other hand, there was no unanimous agreement in the Council on the proposal to increase from 6 months to 3 years the duration of sanctions against Bank of Russia assets frozen in the EU. This proposal aims to convince the G7 partners, especially the United States, of the legal stability of the future mechanism, so that they will grant bilateral loans to Ukraine via the ULCM. Hungary is asking to wait for the outcome of the elections in the United States in early November, which could change the course of Western military support for Ukraine.
“There is no consensus on the prolongation of the sanctions regime in the Council. I don’t expect progress in the coming weeks. The discussions will continue into November”, indicated this diplomatic source.
On Tuesday, progress will also be discussed on the ‘Ukraine Facility’, another EU macrofinancial assistance package for Ukraine worth €50 billion over the period 2024-2027.
RRF. The Ecofin Council will also traditionally review the implementation of the RRF Facility, the budgetary instrument of Next Generation EU, without, however, considering the possibility of extending the European Recovery Plan beyond 2026.
Without debate, it will adopt revised recovery plans for two Member States: Portugal (https://aeur.eu/f/dpl ) and Lithuania (https://aeur.eu/f/dpm ).
Taxation. The ministers will adopt new conclusions on the revision of the EU’s ‘black list’ of uncooperative jurisdictions for tax purposes. Fiji, which joined the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) in May, may no longer be included (see EUROPE 13418/14).
The EU’s ‘grey list’ of third countries and jurisdictions that have made commitments on good tax governance will also be updated (see EUROPE 13354/23).
The ministers will also follow up on the meeting of G20 finance ministers and central bank governors in July. The central bank governors had undertaken to cooperate to ensure that high-net-worth individuals were effectively taxed (see EUROPE 13463/5).
Finance. On Tuesday, the Hungarian Presidency will present the state of progress of legislative proposals covering financial services related to capital markets and investment.
Inter-institutional negotiations (‘trilogue’) with the European Parliament will begin shortly on the retail investment strategy (see EUROPE 13446/3), the regulation of financial reporting requirements (see EUROPE 13435/4), the revision of the rules on benchmarks, in particular the use in the EU of benchmarks provided by an administrator located in another Member State (‘benchmark regulation’) (see EUROPE 13398/36).
The ministers will also be briefed on the progress made in implementing European legislation adopted in recent months, in particular the revision of the ‘Solvency Directive’, the ‘Insurance Recovery and Resolution Regulation’, the EMIR Regulation and Directive governing market infrastructures, and the ‘Listing Act’ Regulation and Directive aimed at making it easier for European companies, particularly SMEs, to raise capital on the markets.
Climate. It should be noted that, as they do every year, the ministers will approve conclusions on financing the fight against climate change ahead of the 2024 United Nations Climate Change Conference (COP29), scheduled to take place in Baku, Azerbaijan, in November (see EUROPE 13493/25, 13495/13). The figures for the annual contribution from the EU and the Member States will be released at a later date.
European Semester. Finally, the ministers will have an exchange of views on the lessons to be learned from the ‘European Semester’ budgetary process, on the basis of a presentation of technical discussions held within the Council’s ‘Economic and Financial Committee’. They will be asked to provide political guidance on how this process will evolve with the entry into force of the revised Stability Pact in early 2025. (Original version in French by Mathieu Bion, Anne Damiani, Bernard Denuit)