Brussels, 23/03/2007 (Agence Europe) - At the ECOFIN Council of Tuesday 27 March, EU finance ministers will be focussing on two pieces of draft legislation on financial services. Unless something spectacular happens at the last minute, they are expected to reach agreement in principle on the draft directive amending criteria and procedures for the prudential assessment of acquisitions and increased stakes in companies in the financial sector (see EUROPE 9263) and preliminary agreement on the payment services directive (see EUROPE 9080).
Mergers and cross-border acquisitions. The Council will be asked on Tuesday, after a public hearing, to approve a political compromise accepted by the European Parliament earlier this month (see EUROPE 9386). The new directive will introduce a list of five criteria that competent authorities will sue to decide whether a cross-border merger or acquisition should go ahead. The criteria to assess the quality of the purchaser cover the acquirer's reputation, the experience of the managers of the future company, the acquirer's financial solidity, and the acquirer's respect for EU legislation (suspected money laundering or funding of terrorism might impact on the new body). The directive reduces the maximum response time to notification of planned deals. The Polish delegation has announced that it will be making a statement when the directive is adopted.
Payment services. At a public hearing, the ministers are expected to reach preliminary agreement on the draft financial services directive. Considerable progress has been made in this field this week and a qualified majority of member states seemed to have formed on Wednesday over the German presidency's draft compromise deal (see EUROPE 9392). Three-way interinstitutional dialogue was organised on Thursday on the issue to study the criteria whereby new payment institutions would be allowed to grant credit for purchase operations and the capital requirements for new entrants depending on the services they provide. European sources suggest that if the minor technical changes requested by the European Parliament are accepted, then EU ministers will be able to reach the qualified majority that emerged on Wednesday. The European Parliament is calling for a specific reference to ancillary credit to be added to the consumer credit directive.
On Monday evening, the Eurogroup will look at the economic situation in the eurozone as usual. After discussing the redistribution of the benefits of growth at their previous meeting (see EUROPE 9375), the recent hike in interest rates by the European Central Bank will certainly give the EU13 finance ministers plenty to talk about. Ahead of a wider debate by the EU27 over dinner the next day, the eurozone ministers will also prepare for the Spring summits of the World Bank and the International Monetary Fund in Washington on 14-15 April 2007. Progress in reforming the IMF will also be discussed.
The ECOFIN Council will adopt opinions on the Convergence Programmes of Latvia, Bulgaria and Romania, and the Stability Programmes of Belgium and Spain. The Austrian and Czech programmes still have to be examined by the Commission (see EUROPE 9381). The Council examined the programmes of the other twenty member states at its most recent meeting (see EUROPE 9376). Ministers will also adopt without debate a recommendation on updating in 2007 the Broad Economic Policy Guidelines (BEPG) for 2005-2008. The document submitted by the ministers for approval at the European Council (see EUROPE 9376 and 9383) foresees special country-specific recommendations and recommendations for the eurozone as a whole. Conclusions will be adopted on coordinating national direct taxation systems based on three reports adopted by the Commission in December 2006 (see EUROPE 9331).
2008 Budget Guidelines. In its conclusions document, the Council will stress the importance of applying similar budget rigour to the EU budget as to national budgets. The document notes that it is crucial at the start of any new financial year to keep sufficient room for manoeuvre to ensure good financial management and cover unforeseen events. The Council is aware that the forecasts for 2008 are particularly difficult to make because it is necessary to predict money for new action, intermediary payments and closing programmes from the former financial period. The ministers stress the importance of funding for the EU's common foreign and security policy and the fact that the budget has to match the measures and rules of the interinstitutional agreement.
Integrated Internal Control Framework. The Commission will make its first progress report on the implementation of the Integrated Internal Control Framework Action Plan (see EUROPE 9382), concerning 12 actions which have already been implemented. 28 further actions are expected to be implemented by the end of the year. (mb/ab/lc)