My right honourable friend the Chancellor of the Exchequer (Alistair Darling) has made the following Written Statement.

The Economic and Financial Affairs Council was held in Luxembourg on 3 June 2008. The Chief Secretary to the Treasury attended for the UK. Items on the agenda were as follows:

Implementation of the Stability and Growth Pact

Ministers agreed to the abrogation of the excessive deficit procedures for Italy, the Czech Republic, Portugal and Slovakia. The recommendations for the abrogation were based on the Commission's spring 2008 economic forecasts which confirmed that the deficit to GDP ratio for these member states would fall below the 3 per cent reference value and remain below it in future years.

EMU@10

The council held an exchange of views on the basis of the recent Commission communication marking the 10th anniversary of European monetary union. The communication reflects on the success of the single currency over the past decade, including its contribution to macroeconomic stability, cross-border trade and investment, financial integration, and its role as a world currency. It also highlights future challenges, citing globalisation, climate change mitigation and financial market turbulence as particular examples.

Convergence reports by the Commission and the European Central Bank

Ministers exchanged views on the progress made against the convergence criteria by those member states seeking to join the euro, with a particular focus on Slovakia. On the basis of the report Ministers noted that Slovakia had met the criteria for entry into the euro on 1 January 2009, pending a discussion by heads of state and government at the European Council on 18 and 19 June 2008.

Preparation of the European Council: Food prices

As formally requested by the UK at the May ECOFIN, member states held an exchange of views on the issue of food prices in the context of recent commodity price inflation. This debate, and the council note which resulted, will prepare the forthcoming discussion at heads level at the June European Council. The UK welcomed the opportunity to discuss this important issue at European level, and looks forward to the European Council discussion producing a strong set of conclusions outlining short-term and mid- and long-term measures at EU and international level.

Financial services

Clearing and settlement

Ministers agreed a set of council conclusions on the ongoing workstreams to improve the market infrastructure for clearing and settlement of equities, derivatives and bonds. The UK strongly supports this work.

Solvency II

The council noted and agreed to the progress report from the Commission on the state of play of the Solvency II directive on insurance and reinsurance. Further discussion of the directive will now take place under the French presidency. The UK supports work to ensure more effective supervision of pan-European insurance groups.

Deposit Guarantee Scheme

Ministers held an orientation debate on deposit guarantee schemes, on the basis of an initial discussion at the April Informal ECOFIN on the functioning of such schemes for cross-border firms. The debate gave a political steer for the official level work on guarantee schemes. The UK views this work as very important and has offered to share expertise with other member states based on our own experiences.

Taxation

VAT on financial and insurance services

The council took note of the state of play on Commission proposals for changes to the VAT treatment of financial services and insurance products on the basis of a presidency progress report. The UK welcomes the progress made under the Slovenian presidency on the modernisation on the VAT exemption for financial services.

Excise duties: Proposal for a directive concerning the general arrangements for excise duty

Ministers noted a progress report on the proposed directive on excise duty, which would update and simplify the arrangements for excisable goods in the EU and establish a legal base for a new computerised administration system. The French presidency will continue work on this dossier.

Report of the Code of Conduct Group (business taxation)

The council took note of a report from the Code of Conduct Group on business taxation on its work under the Slovenian presidency and agreed conclusions that underlined the importance of agreement on the group's future work programme and noted that ECOFIN would return to this issue under the French presidency. The Code of Conduct Group is a group of high-level representatives, chaired by Mrs Jane Kennedy, the Financial Secretary to the Treasury, which works to identify and eliminate harmful tax practices. The UK is a strong supporter of the work of the group.