Friday 3 February 2017
A meeting of the Economic and Financial Affairs Council (ECOFIN) was held in Brussels on 27 January 2017. EU Finance Ministers discussed the following items:
Early morning session
Ministers were briefed on the outcomes of the 26 January meeting of the Eurogroup and the European Commission presented an update on the current economic situation.
VAT: reverse charge mechanism
The Commission gave a presentation on the proposal for a temporary derogation to apply a generalised reverse charge mechanism, which was followed by an exchange of views.
Current financial service legislative proposals
The Council presidency provided an update on current legislative proposals in the field of financial services.
Presentation of the presidency work programme
The Maltese presidency of the Council of the European Union presented its priorities for ECOFIN over the next six months.
European semester 2017
Ministers adopted Council conclusions on the annual growth survey (AGS), alert mechanism report (AMR) and approved the Council recommendations on the economic policy of the euro area.
Basel Committee’s post-crisis banking reform agenda
The Commission gave Ministers an update on the progress made on the finalisation of the post-crisis reforms since the Basel meeting in November 2016, followed by an exchange of views between Ministers.
High-level group on own resources
Mario Monti, Chair of the high-level group on own resources, presented the group’s final report, which was followed by an exchange of views between Ministers.
EIB Economic Resilience Initiative
Werner Hoyer, president of the European Investment Bank, outlined the state of play of the Economic Resilience Initiative and provided preliminary evidence of its initial implementation and the ongoing fundraising process for the grant component of the initiative.
NATO-led Kosovo Force
A new order has been made under section 56(1B) of the Reserve Forces Act 1996 to enable reservists to be called into permanent service in support of the United Kingdom’s contribution to the NATO-led Kosovo Force (KFOR).
The communiqué issued at the Warsaw summit in July 2016 makes it clear that the future operational posture, capability and disposition of KFOR will be conditions based and not calendar driven. Stability and security in Kosovo help to enhance the security of the United Kingdom. Intelligence surveillance and reconnaissance capabilities are important contributors to KFOR’s situation awareness and its ability to engage with local and international institutions, and of Commander KFOR's ability to assess future posture. The UK has agreed to generate Human Terrain Reconnaissance forces to enhance the situational awareness of Commander KFOR to execute his mandate in Kosovo. This capability will operate in parallel with and within the ISR Battalion headquarters to provide command and control for UK forces.
Some of the specialist skills needed to meet this requirement are held within the Army Reserve. UK forces will deploy for a period of 12 months, consisting of two rotations of six months each. It is planned for the first unit to deploy in late March 2017. The number of reservists anticipated to deploy as specialists or in support of regular units is estimated at up to 22 per deployment.
The order took effect from the beginning of 23 January 2017 and shall cease to have effect at the end of 22 January 2018.
Environment, Food and Rural Affairs
I attended the EU Environment Council in Brussels on 19 December along with the Minister for Climate Change and Industry, my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd).
I wish to update the House on the matters discussed.
EU Emissions Trading System (ETS)—progress report.
The Council undertook a full roundtable debate on the EU emissions trading system, on the basis of the presidency’s progress report. Ministers set out respective policy positions, and called for agreement at the next Environment Council in February. The presidency regretted that it had not been able to achieve a general approach, but felt that progress had been made on a range of technical issues. It identified the main issues to be resolved as rules for supporting sectors at risk of “carbon leakage” (where production relocates outside of the EU as a result of carbon costs); tackling the over-supply of emission allowances to provide a more meaningful carbon price signal; and management of the funds which support decarbonisation of the EU’s industrial and energy sectors. The Commission drew attention to the recent ENVI Committee vote in the European Parliament, setting out that this showed compromise was possible on ETS, and called on the Council to match the European Parliament’s timetable in order to allow trilogues to start in March. It highlighted the importance of reaching agreement on the EU ETS directive in order to demonstrate progress in implementing the Paris agreement and in providing business and investor certainty.
The UK thanked the outgoing presidency for its hard work and called on the Council to maintain ambition and pace under the Maltese presidency, with a view to finding consensus. The UK’s main priorities were addressing the surplus of allowances and strengthening the carbon price signal via an amendment to the market stability reserve; targeting carbon leakage protection to those genuinely at risk; ensuring that the modernisation fund was based on clear, collaborative governance; avoiding the infringement of member states’ fiscal sovereignty through provisions to allow member states to provide compensation for the indirect costs of EU ETS; and alleviating as much administrative burden as possible without undermining environmental integrity.
AOB—Effort Share Regulation and Land Use, Land Use Change and Forestry (LULUCF) Regulation.
The presidency gave an update on the state of play of these live legislative negotiations following publication of the Commission proposals in July 2016.
AOB—Communication on Clean Energy for All Europeans.
The Commission outlined the objectives and content of its recently published “clean energy package” and communication on clean energy for all Europeans.
AOB—Report on recent international meetings: UNFCCC Marrakesh, 7-18 November (COP22).
The presidency outlined the progress made at UNFCCC COP22 in Marrakesh in November. The Commission underscored its commitment to making progress on the 2030 climate and energy framework.
The protection of human health and the environment through sound management of chemicals—Council conclusions.
The presidency underlined the importance of the Council adopting conclusions given the ongoing work in this area including at international level. All who spoke endorsed the conclusions but stressed points of importance, including the ongoing regulatory fitness check (REFIT) of REACH, the commitments made under the 7th environmental action plan, the links to the circular economy package, the need to address endocrine disrupting chemicals (EDCs) and more consumer information.
The UK stressed the need to ensure chemical policy continued to be based on a better regulation and a risk-based approach.
On this basis the presidency concluded the conclusions were adopted as drafted.
AOB—REFIT fitness check of habitats and birds directives.
The Commission informed delegations of its findings, presented in the recent staff working document on the nature directives, which noted that the directives were fit for purpose. The Commission noted that the EU should focus on smarter implementation. The UK welcomed the conclusions of the Commission’s fitness check (to improve implementation of the directives and not to reopen them) and called for more effective implementation together with the sharing of experiences on how to do this between member states. Many other member states made similar points and asked the Commission to actively focus on better tools and resources in order to achieve better implementation.
AOB—Outcome of International Meetings: Convention on Biodiversity (CBD), 66th Meeting of International Whaling Commission and COP9 UNECE Convention on Transboundary Effects of Industrial Accidents.
The presidency and the Commission informed Council on the outcomes of these recent international meetings.
AOB—State of play of the Waste Package.
The Council took note of information from the presidency and the progress it had made on negotiations of the waste package. The Commission agreed there was good progress and expressed hope a deal could be reached with the European Parliament during the Maltese presidency. On the substance, the Commission supported a common methodology for calculating recycling targets, separate collection, the use of economic instruments and ambitious recycling targets. Other member states intervened on topics of interest, including conflicting views on the levels of targets and reuse within the package, the phase-out of landfill and the proposed calculation methodology.
The UK welcomed the progress made under the Slovak presidency and emphasised the need to agree definitions and calculation methodology before setting targets. The UK also called for greater flexibility in the application of provisions on the circular economy and, while being supportive of the principle of reuse, highlighted the bureaucratic hurdles its inclusion in reporting could entail.
AOB—Maltese Incoming Work Programme.
The presidency gave a short summary of its achievements over the last six months. Malta, as incoming presidency, then explained its priorities, including a desire to build on the Marrakech COP22, advance both ETS and non- ETS negotiations and continue work to amend the waste directives. Priorities also included a focus on marine issues, including a development of a plastic strategy in the context of the circular economy, work on the nature directives, amending the restriction of hazardous substances (ROHS) directive and preparations for conferences of the parties on the Stockholm convention on persistent organic pollutants (POPs) and the Rotterdam convention on the prior informed consent procedure for certain hazardous chemicals and pesticides in international trade.
Further Environment AOBs.
Council took note of an AOB from Austrian, French, Finnish and German delegations, supported by Czech Republic and Italy, which encouraged member states participation in next year’s European sustainable development week. Council also took note of an AOB from Hungary on the outcome of the Budapest water summit and an AOB information from the Commission on the communication on next steps for a sustainable European future. Poland presented an AOB on odour nuisance. The Czech Republic presented its AOB on the REFIT evaluation of the EU ecolabel.
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