The Economic and Financial Affairs Council will be held in Brussels on 17 May 2011. The following items are on the agenda:

Regulation on short selling and certain aspects of credit default swaps

Following further work, ECOFIN will be asked to agree a general approach on the short selling regulation. The regulation intends to harmonise both short selling requirements across the EU and the powers that regulators may use in exceptional situations where there is a serious threat to financial stability or market confidence. The Government believe that proposals should not impact market efficiency and liquidity, in particular in relation to sovereign debt.

Draft general budget for 2012

The Commission will present its draft budget for 2012. The Government believe that, in proposing a 4.9% increase in payments, the draft budget for 2012 is unacceptable. In line with the agreement made between the UK, France, Germany, the Netherlands and Finland in December 2010, the Government’s opinion is that growth in the EU’s annual budget must be curbed, in order to reflect difficult economic conditions and tough measures taken by national Governments to cut spending. The Government intend to work with other member states to achieve the best possible deal for the taxpayer.

Savings taxation directive

The savings directive forms part of the EU’s “good governance in taxation” agenda, which complements G20 efforts to improve international tax co-operation and reflects the latest OECD standards on tax transparency. The Council may hold an orientation debate on amendments to the directive, which seek automatic exchange of tax information with the aim of combating cross-border tax fraud. The UK fully supports the aims of the amending directive, and hopes that the EU can move towards an agreement.

Financial sector taxation

The Commission will present an interim report to the Council on financial sector taxation. The Government are content with the report, which stresses the need to look at financial sector taxation in the round, notes the importance of establishing the purpose of any financial sector tax, and sets out next steps.

Commodity markets

Following discussion by Ministers at the informal ECOFIN in April, the Council will agree conclusions on commodity markets. The Government support the conclusions, which aim to: improve the efficiency and transparency of global commodity markets; improve supply responsiveness and productivity, especially in respect of the agricultural sector; and mitigate demand for commodities, in particular reducing the energy-intensity of future growth.

Financial support to Portugal

Following the request by the Portuguese authorities for financial assistance and subsequent discussion at the informal ECOFIN in April, ECOFIN is expected to adopt a Council recommendation to Portugal with a view to bringing an end to the situation of an excessive Government deficit and a Council decision on granting Union financial assistance to Portugal.

Review of the economic adjustment programme for Ireland

The Commission will present the outcome of the first and second quarterly reviews of Ireland’s programme by the IMF, Commission and ECB in April, and its assessment on whether to release the second tranche of funds. The Government expect the assessment to be broadly positive. The first tranche of the UK bilateral loan is available to Ireland following the programme’s third review, which is expected to take place in September 2011.

Financing climate change, preparation of UN meetings

In preparation for discussions by the United Nations, ECOFIN will be asked to endorse the EU report on “Fast Start” climate finance, and to approve Council conclusions on issues and next steps for international climate finance. The fast start report sets out details of the €2.34 billion of fast-start finance provided by the EU in 2010, and details of specific actions supported by this finance. The UK welcomes the report and hopes that any conclusions build substantively on previous Council conclusions, as well as demonstrating our commitment to delivering our long-term climate finance target.

Information on the informal ECOFIN meeting

The presidency will give a debrief of the April informal ECOFIN.