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Volume 477: debated on Thursday 12 June 2008

The Economic and Financial Affairs Council was held in Brussels on 14 May 2008. I attended for the UK. Items on the agenda were as follows:

Quality of Public Finances: Efficiency of Public Expenditure on Social Transfers and Education

Member states adopted Council conclusions on the quality of public finances. The conclusions followed a discussion at the Informal ECOFIN in Brdo, Slovenia in April. This builds on conclusions on the quality of public finances agreed under the German and Portuguese presidencies in 2007. ECOFIN will return to this work in early 2009.

Western Balkans Investment Framework

Member states adopted Council conclusions on the next steps on the Western Balkans investment framework. The UK supports work on the investment framework, which will bring together the donor funding streams for the Western Balkans, and is a priority for the Slovenian presidency. The Commission and EIB committed at ECOFIN to continue to support the framework.

Financial services

i) Financial Stability Arrangements: Supervision, including an Update of the Roadmaps

Ministers agreed a unified set of Council conclusions on arrangements on financial stability and supervision, building on the EFC draft Council conclusions on supervision and an update of the roadmaps on “Review of the Lamfalussy Process”, “Strengthening EU Arrangements for Financial Stability”, and “On Actions Taken in Response to the Financial Turmoil”. The UK supports this work, which should help ensure that actions taken by the EU complement those taking place at international level. The UK also welcomes the inclusion in the conclusions of the UK proposals for supervisory colleges, intended to improve cross-border supervisory co-operation.

ii) Communication on Financial Education

The Council agreed to conclusions on financial education, which suggested some initiatives and practical assistance for helping member states to improve the levels of financial education within their countries. The UK recognises the potential value of this work, on which the UK has a strong track record at domestic level.

iii) White Paper on Mortgage Credits

Member states agreed to Council conclusions on a possible single market for mortgages. The Commission will now continue its consultation on mortgages. The UK supports voluntary initiatives that may improve EU market efficiency rather than harmonising consumer protection rules.

Preliminary Draft General Budget 2009

The Commission presented the preliminary draft general budget (PDB) for 2009 to the Council. This sets payment appropriations at 116.7 billion euros, or 0.90 percent. of EU/GNI. Negotiations on the PDB will now be taken forward at the July Budget ECOFIN Council.

Dialogues with Third Countries: Economic and Financial Issues

The Council received an oral update from the Commission on the state of play of the dialogues with third countries, and discussed the economic and financial issues of the EU-US summit preparation and the ASEM Finance Ministers’ Meeting. Ministers also heard a report on the outcomes of the 13 May Transatlantic Council.


i) Indirect Taxation: Fight against Tax Fraud

The Commission gave an oral debrief to the Council on the state of play of the consideration of measures to combat tax fraud. This followed the request by the December 2007 ECOFIN and discussion at the March ECOFIN. Member states were unable to agree Council conclusions on VAT fraud, and will return to the subject at future meetings of ECOFIN. The Commission also committed to bring forward in the autumn new proposals on conventional measures to combat fraud. The UK remains strongly supportive of work that will help in the fight against missing trader intra-community (MTIC) and other VAT fraud, while remaining committed to minimising the burdens on legitimate businesses.

ii) Savings Taxation

The Commission provided an informal oral report on the functioning of the savings tax directive, in view of recent developments involving Liechtenstein investment vehicles and following the request of the March ECOFIN Council. In recognition of the importance of ongoing work to combat tax evasion, Ministers and the Commission agreed an accelerated timetable for the production of the final report, which the Commission will produce and will then be followed up by specific proposals on extending the directive. The UK strongly supports the Commission’s continued dialogue with third countries with a view to bringing them into the savings tax directive.

iii) Good Governance in the Tax Area

Member States agreed conclusions containing a specific provision on good governance in the tax area. This will now be added to relevant agreements to be concluded by the Community and its Member States with third countries.

Strategy for the Evolution of the Customs Union

The Council adopted the conclusions on the Strategy for the evolution of the Customs Union on the 40th anniversary of the Union’s creation. The UK supported the conclusions, which reiterated the main points of the Commission communication endorsing the role of customs with regard to the trade, financial and security interests of the Customs Union and supporting the need for common strategic objectives.

‘Any Other Business’: Discussion of Food Prices

In advance of the June ECOFIN, the UK requested that the presidency add to the agenda a discussion of the rising cost of food and other commodities in recognition of the severe effect on consumers in the EU and in the developing world.