The finance ministers of the Member States of the European Union (EU) met in Brussels on 14 July 2015, to attend the first formal meeting of the "Economic and Financial Affairs" Council (Ecofin) under the Luxembourg Presidency.
The ministers then concluded the 2015 European Semester process by adopting the country-specific recommendations and had an initial exchange concerning the five presidents' report on the deepening of the Economic and Monetary Union (EMU). The Luxembourg Minister of Finance and President of the Ecofin Council, Pierre Gramegna, also presented the work programme of the Luxembourg Presidency of the Council.
The work programme of the Luxembourg Presidency
Inasmuch as since 1 July 2015, Luxembourg has assumed the six-monthly Presidency of the Council of the EU, the Minister of Finance, Pierre Gramegna, presented the programme of the Presidency on Economic and Financial Affairs to the Council.
As he specified at the press conference at the end of the meeting, one of Luxembourg's first priorities will be taxation, within the context of combating fraud and tax evasion. "We are going to be very active in this field and make sure that all the issues that are on the table are going to advance quickly", said the Minister. He would like to finalise the proposal relating to the exchange of information on tax rulings by the end of the Presidency" given its high degree of importance and visibility". Pierre Gramegna also confirmed that the Presidency would work to advance the work on a future proposal for an amended directive relating to the Common Consolidated Corporate Tax Base(CCCTB).
Another priority of the Presidency in this field will be the roll-out of the action plan for a fair and efficient corporate tax system, proposed by the Commission on 17 June 2015. The Minister commended the agreement reached, within the high level working group of the Council, on the road map for the Luxembourg Presidency which will set the rhythm of the work during the next six months. He also specified that it will be important to "translate the OECD recommendations into EU legislation" in the context of the BEPS initiative ("base erosion and profit shifting") which will be completed in the autumn of 2015.
Investment in order to boost growth is another priority of the Presidency. Pierre Gramegna congratulated the Latvian Presidency on the agreement reached concerning the European Fund for Strategic Investments (EFSI), the financial arm of the "Juncker" plan for the investment of 315 billion euros over three years. The Presidency "will make sure that it is rolled out properly and operationally", stated Pierre Gramegna.
In the context of boosting growth, the subjects of financial services and of the Capital Markets Union"are of the utmost importance", continued the Minister. He stated that the discussion had singled out two legislative initiatives "where concrete work may be done in the next six months", specifically a directive on securitisation which is intended to render securitisation more transparent, simple and of better quality as well as a review of the Prospectus Directive of which the goal is to facilitate access to financial markets for SMEs.
More briefly, on the subject of economic governance and the European Semester, Pierre Gramegna underlined that the Presidency will work on the enhanced European Semester which will begin in December 2015. The Minister also lauded the Council's position on the budget adopted "unanimously" by the Committee of Representatives of the Member States to the EU (Coreper), which he hailed as "good news" which paves the way for discussions with the European Parliament.
Pierre Gramegna also stated that the ministers had agreed to discuss the financing for combatting climate change in the context of the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21). The subject will be addressed at the Informal Meeting of Ministers of Economic and Financial Affairs on 11 and 12 September 2015 in Luxembourg, with a view to having a coordinated position for the Paris conference.
The five presidents' report on the deepening of the Economic and Monetary Union (EMU)
The Council had an initial discussion on the next stages of deepening the Economic and Monetary Union (EMU) based on the five presidents' report, focusing on the short term measures.
This report provides measures to be implemented over three distinct stages, the first of which (until 30 June 2017) does not require any amendment to the treaties. This "very important" report, according to Pierre Gramegna, had been presented to the European Council of June 2015 which had asked the Council of the EU to review it promptly.
The Council in this context agreed that before addressing the issue of deepening,"it is important to implement what has already been agreed at the European level", stated the Luxembourg Minister, who underlined that the Member States were "immediately invited" to implement "the Bank Recovery and Resolution Directive (BRRD). The ministers also underlined the importance of implementing the fiscal compact. "All this will strengthen the credibility of the eurozone and restore confidence", emphasized Pierre Gramegna.
The Minister reckoned that the report comes at a very important juncture, because there is an "objective need" to strengthen the EMU while the Greek crisis in the last few days has shown a "real need to deepen this cooperation". The existing tools (Banking Union, European Stability Mechanism) have nevertheless enabled the EU to handle this crisis "in an efficient way", he said.
As regards the first stage laid out by the report, the Minister stated that it is necessary for the Commission to very quickly submit "concrete proposals" but that the medium and long-term issues "also warrant attention now". The issues that need treaty changes "require" thorough preparatory work which will be initiated under the Luxembourg Presidency, said Pierre Gramegna.
Pierre Gramegna lastly made reference to three subjects which have been identified by the finance ministers as having particular importance. He referred to the Single Resolution Fund where the issue that needs to be addressed urgently is the matter of bridge finance for bail-in and backstop of the Single Resolution Fund. Likewise, the deposit guarantee scheme needs to be improved, both in the short and medium-term. In the current context of the differing national systems, a reinsurance system could be contemplated in the short term, whilst a veritable pan-European deposit guarantee system is likely only over the medium term. Lastly, Pierre Gramegna reckons that the macro-economic imbalance procedure needs to be strengthened and made more effective.
These are priorities that have been confirmed by the Vice-President of the European Commission, Valdis Dombrovskis, for whom the Banking Union is key. "It is quite clear we need to do more to break the link between the sovereign and banks and avoid any potential spillovers to other countries", he said. "We also need to start work immediately on overcoming the fragility in the current set-up of national deposit guarantee schemes and start working on a privately-funded European Deposit Insurance Scheme".
The Luxembourg Minister concluded with the social dimension, underlining that it is integrated in the five presidents' report and that it warrants attention: "We appeal to all our partners to not neglect this social dimension which is key to the acceptance of the EMU amongst our populations".
The 2015 European Semester
The Council has also formally concluded the European Semester 2015 process by adopting the country-specific recommendations concerning the economic, budgetary and employment policies, addressed to the Member States of the EU and the eurozone. The draft recommendations of the Council were approved by the European Council of June 2015 and were the subject of separate conclusions of the Ecofin Council.