Press Release - Working towards further strengthening the EU’s economic governance
12.11.2012, 10:15 (CET)
The European Union’s Economy and Finance Ministers convene in Brussels on Tuesday, November 13, 2012, to discuss ongoing dossiers aimed at strengthening the economic governance and financial framework of the EU. These dossiers include the “two-pack”, the banking Single Supervisory Mechanism (SSM) and Revised Capital Requirements Rules (CRD IV). The ECOFIN Council will also be briefed on the latest developments on the Financial Transaction Tax.

Two-Pack: Moving Forward

On the issue of the “two-pack” legislation, the Cyprus Presidency will report to the ECOFIN Council on the remaining outstanding matters. The Presidency will also ask for an approval of a negotiating mandate in the current trilogues between the Council, the European Parliament (EP) and the European Commission. The goal is to reach an agreement with the EP and the Commission on the two draft regulations by the end of the year.

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.

Cyprus’ Minister of Finance, Vassos Shiarly, who will chair tomorrow's meeting, says:

“The Cyprus Presidency considers the prompt adoption of the two-pack as a very important step for further strengthening the economic governance framework in the EU. Our aim is to move forward on this issue as fast as possible and conclude by the end of the year at the latest, as agreed during the last European Council. ”

Revised Capital Requirements Rules (CRD IV): State of play

The Presidency will debrief Ministers on the state of play related to the proposals for Revised Capital Requirements Rules, which amends the EU’s rules on capital requirements for banks and investment firms. The Council is expected to hold an exchange of views with the aim of reaching a political agreement before the end of the year.

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. The Basel Committee constitutes an international forum for regular cooperation on banking supervisory matters and aims at improving the quality of banking supervision worldwide.

“This is a very important issue and despite the difficulties observed so far, the Cyprus Presidency will put maximum effort in order to conclude it by December 2012 ,” Mr. Shiarly added.

Banking Supervisory Mechanism: Orientation Debate

The Presidency will brief Ministers on the state of play and key open issues related to the establishment of a Single Supervisory Mechanism for credit institutions in the eurozone and in other EU member states choosing to participate. Ministers are expected to provide guidance on the way forward, respecting the timelines set by the European Council.

On September 12 2012, the Commission proposed the establishment of a single supervisory mechanism for banks led by the European Central Bank. 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 European Commission proposal.

Financial Transaction Tax: state of play

Ministers will be updated by the Presidency on the state of play as regards the enhanced cooperation procedure for a Financial Transaction Tax. The Commission will present the relevant proposal, which will serve as a basis for discussions.

The conclusion of June’s ECOFIN Council meeting was that there was no general consensus on the proposed directive aimed at introducing an EU-wide financial transaction tax and other avenues have been explored since then, specifically  the enhanced cooperation procedure. This procedure allows for a group of interested countries to proceed amongst themselves, making use of the EU institutions, by the end of 2012.

The number of countries that have submitted a request for enhanced cooperation so far exceeds the minimum number of nine countries demanded by EU laws.

Presidency Spokesperson in Brussels
Nikos Christodoulides

Coreper II

Telephone: +32 27395152
Mobile: +32 473400441
Minister´s Communications Officer
George Sklavos

Ministry of Finance

Telephone: +357 22601268
Communications Officer
Panikos Constantinou

Ministry of Finance
Economic Governance
Telephone: +357 22601266