Brussels, 29/01/2008 (Agence Europe) - Slovenia will work to move forward the economic and financial objectives set with Germany and Portugal in their “Presidential trio”: ensuring efficient and effective management of economic policy; improving the quality of public finances in the EU; and taking further steps towards completing the internal market (financial services and taxation). During the six months of the Slovenian Presidency, it is of the greatest importance that “we strengthen the trust of citizens in the EU, and in its ability to confront the challenges of present and future,” Slovenian Finance Minister Andrej Bajuk told the MEPs on the economic and monetary committee on Tuesday 29 January. The work over the coming months can be divided into three broad areas.
Macroeconomic situation and policies. In the wake of the recent turbulence in financial markets, prospects are not as good as they might be. Potential losses in the financial area have grown considerably in size, increasing from €100 billion to approximately €400 or €500 billion, he said. While growth is likely to be weaker in 2008 than over the course of the last few years, growth estimates remain, nonetheless, “close to potential” (estimated to be around 2%) and economic fundamentals “remain very strong”, Bajuk said, calling for reform and budgetary discipline to be pursued. . “I don't agree with your assessment of the European economy,” said Cristobal Montoro Romero (EPP-ED, Spain), opining that the real problem for Europe was being so badly affected by the US crisis, to the extent that the hope was only for growth of not even 2%. Given the risks for price stability, it was important to prevent any inflationary spiral through wage increases, Bajuk went on. This message, which aimed to avoid second round effects, is to be handled with care, warned Alain Lipietz (Greens/EFA, France), however, because with increases in the prices of essentials, it is the poorest who suffer most from inflation.
Financial services. On the very same day as the meeting on financial stability between Brown, Merkel, Prodi and Sarkozy in London, Bajuk said that the Presidency would do its utmost to ensure that discussion on the impact of the financial turbulence and adoption of measures would take place in the existing institutional setting (in particular, the March European Council and the informal meeting of Finance Ministers on 4-5 April). Discussions must be carried on and decisions taken within the institutional framework of the EU, he told Ieke van den Burg (PES, Netherlands), and he went on to say that he expected to receive information on the meeting from those taking part, so that there could be general discussion in the Ecofin Council. On supervision, Pervenche Berès (PES, France), chairwoman of the parliamentary committee, underlined the urgency with which the role of the level 3 committee should be examined, fearing that the Commission might seek to skirt round the issue. Bajuk said that one had to be “pragmatic” on this point and “first of all discuss what can be done now in terms of cooperation” between national supervisors before considering supra-national bodies.
On the legislative level, the Solvency II project was an importance priority for the Presidency, which wanted to progress “as quickly as possible” towards reaching a first reading agreement with the EP. This “far reaching” project seeks to “fill in the gaps” in existing legislation on equity called for by insurance and re-insurance companies. Bajuk then said that “a general approach” could be brought forward under Slovenian Presidency, allowing a decision to be taken in the second half of the year.
“Towards the end of April”, the Commission is expected to present a proposal to amend and modernise the UCITS (Undertakings for Collective Investments in Transferable Securities) directive, in order, especially, to bring greater protection for investors. The Council hopes agreement will be reached as quickly as possible. In spring, probably towards mid-April, the Commission is expected to propose amendments to the directive financial collateral directive, and the settlement finality directive. The Presidency hopes for rapid progress in both. It will also give consideration to the Commission White Paper on the mortgage credit sector, and the communication on financial education.
Taxation. In the sphere of indirect taxation, the Presidency hopes to make progress towards a simplification of common rules on value added tax and on excise duties (review of directive 92/12). On this point, the Commission is expected to propose simplifications in February. Combating tax fraud is also a matter of importance, while, in terms of direct taxation, the Presidency intends to continue discussions on coordinating national taxation systems. While he did not think that unanimity could be achieved on this issue, Bajuk hoped all parties would realise the need to make progress. (A.B.)