The European Union’s Economy and Finance Ministers today discussed the way forward on a number of ongoing financial and economic issues, with special emphasis on the two-pack and the Single Supervisory Mechanism. The ECOFIN Council which took place in Brussels on Tuesday, November 13, also took stock of developments regarding the Revised Capital Requirements Rules (CRD IV).
During the ECOFIN meeting, the Cyprus Presidency informed ministers on the state of play regarding the two-pack and got a mandate on the way forward for discussions with the European Parliament and the European Commission.
Two-Pack: Moving forward
The aim of the “two-pack” is to enhance macroeconomic surveillance for countries under excessive deficit procedure or countries under a macroeconomic programme. There are also provisions for submitting draft budget plans to the European Commission. The “two pack” is currently discussed in the context of trilogues with the European Commission and the European Parliament and aims to complement what has already been agreed under the so-called “six-pack” of economic governance measures.
“Today we reached an agreement on an updated negotiating position on the second economic governance package, the "two-pack," said Cyprus’ Minister of Finance, Mr. Vassos Shiarly, who chaired the meeting.
“We are hopeful that the flexibility shown by the Council will facilitate our ongoing negotiations with the European Parliament and the European Commission, so that we can reach a deal before the end of the year, in line with the June European Council conclusions,” he added.
Single Supervisory Mechanism: More light shed
The Presidency informed Ministers about the progress made on proposals aimed at establishing a Single Supervisory Mechanism (SSM) for banks in the eurozone and in other EU member states choosing to participate. Ministers today provided guidance on some of the key outstanding issues, so that the ad hoc working group set up to prepare this legislation can continue its work.
On September 12 2012, the Commission proposed the establishment of an SSM for banks led by the European Central Bank, with the aim of preventing banking risks and cross-border contagion from emerging. This proposal is a first step towards a fully integrated financial framework, which includes further components such as a single rulebook, common deposit protection and a single bank resolution mechanism. A temporary Ad-Hoc Working Party on the Banking Supervision Mechanism has been set up, in order to examine the relevant European Commission proposals.
“Today we had a very fruitful exchange of views on the major open issues regarding the establishment of a Single Supervisory Mechanism. It is very important to expedite our work, so that we respect the timelines set by the European Council”, said the Minister.
Revised Capital Requirements Rules (CRD IV): State of Play
The Presidency debriefed Ministers on the state of play related to the proposals for Revised Capital Requirements Rules, which amend the EU’s rules on capital requirements for banks and investment firms.
The CRD IV legislative package, consisting of two proposals [Directive (CRD) and Regulation (CRR)] by the European Commission, aims, inter alia, to transpose into EU law the agreements on capital requirements reached by the Basel Committee on Banking Supervision (the Basel III requirements), as endorsed by the G20 leaders, and confirmed by the European Council.
“CRD IV will form an essential element of the EU's single rulebook and it's important for it to be adopted before the Single Supervisory Mechanism enters into force. It is one of the highest priorities of the Cyprus Presidency”, Mr. Shiarly said.
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