The informal Economic and Financial Affairs Council (ECOFIN) was held in Brussels on 30 September to 1 October 2010. Many of the items discussed at this meeting followed on from issues covered at the 7 September ECOFIN, details of which are below.
The Informal ECOFIN began with a Ministers’ lunch discussion focusing on IMF reform. Ministers then held an initial discussion following a Commission presentation on its economic governance proposals. The informal Council also discussed the Europe 2020 strategy for jobs and growth, focusing on means of making progress on structural reforms.
During the afternoon session, Ministers were joined by Central Bank Governors. Discussions centred on the economic outlook, IMF reform and G20, and the outlook and risks for the financial markets. The importance of fiscal consolidation was reaffirmed.
On the second day, discussions focused on credit rating agencies; financial reform in the EU and US; and a framework for responsible and growth-enhancing behaviour of the financial sector, looking at Basel III and financial levies and taxes.
ECOFIN: 7 September 2010
The Economic and Financial Affairs Council was held in Brussels on 7 September 2010. The Chancellor of the Exchequer represented the UK. The following items were discussed:
Following trilogues, Ministers agreed the financial supervision package. The new proposals will see:
a European Banking Authority established in London;
nine day-to-day supervision of financial institutions remaining at the national level, except for credit rating agencies which, as agreed in December 2009, will be supervised by the new markets authority;
a guarantee that decisions by the new authorities in crisis times and when settling disputes between supervisors cannot impinge on the budgetary responsibilities of national Governments;
a European systemic risk board established to monitor and advise on systemic risk.
The Government are content with the final agreement, which fully reflects the priorities secured by the UK in July.
Ministers endorsed the EU semester. The Government are content with the agreement, which recognises that the UK’s budget will be sent to the EU after it has been presented to Parliament.
The Council exchanged views on bank levies. The Government are a strong advocate of the use of levies as a complement to wider reforms aimed at reducing the probability and impact of banking failures. However, national Governments should decide how proceeds from any bank levy are deployed.
Tax on financial transactions
Ministers held an exchange of views on the possible use of financial transaction taxes. The Government believe that if these are to be properly considered, further discussion would be needed around whether the financial transaction taxes model offers a stable and efficient mechanism. The Council agreed to further discuss the financial transaction tax and bank levies at the informal ECOFIN, before returning as a formal agenda item in October.