The Economic and Financial Affairs Council will be held in Brussels on 7 July 2009. The following items are on the agenda:

Presentation of the presidency work programme

The new Swedish presidency will present its ECOFIN work programme for the second half of 2009, which Ministers are invited to debate in line with article 8 (4) of the Council’s Rules of Procedure.

Follow up to the 18 and 19 June European Council

a) Financial supervisory framework

Following conclusions adopted at the June ECOFIN and by Heads at June European Council, the presidency is expected to outline its strategy for taking forward work on European financial supervision and regulation. The UK is content with the outcomes of both meetings; having secured among other safeguards, commitment in both sets of conclusions that any new powers granted to existing or proposed bodies would not impinge in any way on member states’ fiscal responsibilities.

b) Climate change financing

Heads at the June European Council agreed conclusions on the financing of climate change. The presidency will outline its strategy for member states to reach agreement on a negotiating mandate at the October European Council. The UK believes that work should continue to ensure the EU reaches agreement on the key issues suitably in advance of the Copenhagen conference in December.

Preparation for the G20 meetings

Ministers will exchange views after a meeting of G20 deputies to be held in Basel on 27 and 28 June. This will begin preparation of further meetings in London of G20 Deputies on 3 and 4 September and G20 Finance Ministers and Central Bank Governors on 4 and 5 September. The Government look forward to working with the presidency and member states to ensure that work taken forward at G20 complements work at EU level.

Pro-cyclicality

Following on from progress made at the informal ECOFIN in April, Ministers will be asked to adopt Council conclusions on pro-cyclicality. The Government agree that banks will need to build counter-cyclical buffers in good times, and strongly support ongoing technical work through the Basel Committee to examine the forces that contribute to pro-cyclicality in the financial system and possible mitigating options, as well as the efforts by the EU which complement work by the G20.

Implementation of the Stability and Growth Pact

a) Adoption of legal acts in the excessive deficit procedure

ECOFIN will be expected to adopt Council decisions for member states having breached the 3 per cent. budget deficit criterion, formally entering these countries into the Excessive Deficit Procedure. Council recommendations will also be issued for the correction of these excessive deficits.

b) Adoption of Council opinions on updated stability and convergence programmes

The Council will be asked to adopt Council opinions on the updated stability and convergence programmes of Slovenia, Slovakia, Austria, Belgium and Romania.

Any Other Business

Medium-term Budgetary Objectives (MTOs) and Implicit Liabilities

Following from ongoing work at committee level, ministers will exchange views on the incorporation of implicit liabilities into Medium-term Budgetary Objectives (MTOs). As a country which is neither in the Euro-area nor a member of the Exchange Rate Mechanism (ERMII), the UK is not obliged to set a numerically defined MTO. Any changes to the methodology of incorporating implicit liabilities into MTOs should not change countries’ obligations under the Stability and Growth Pact.