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Good afternoon. Today, we focused on two important issues today – the economic situation and the budgetary instrument for competitiveness and convergence.
Before that, we welcomed Ladislav Kamenicky, the new Slovak Finance Minister, replacing Peter Kazimir, and also Martin Helme, the new Estonian Finance Minister, following the formation of a new government in Tallinn.
On our discussion on the economic situation we took stock of the recent spring forecasts by the Commission and weighted the various risks and potential headwinds ahead of us.
The euro area economy has been growing for a record-breaking 24 consecutive quarters, since the second quarter of 2013. The number of people in employment has increased by 10.8 million compared to six years ago, which is quite remarkable. Unemployment has fallen steadily, although the benefits of this virtuous growth trend have not yet reached all citizens and this is worth reflecting.
Looking ahead, we expect growth and job creation to continue this year, albeit at a modest pace. Despite a slowdown at the end of 2018, first quarter data for this year already shows a pick up in the growth pace of major economies.
There are important risks to this outlook and they are to a large extent external and of a political nature. Trade tensions and Brexit uncertainty are probably the most prominent ones.
We are convinced the euro area is today more resilient and better equipped with tools to handle shocks. Moreover, we are also committed to delivering on the mandate from Leaders to make progress on deepening the economic and monetary union. The progress we make here will also boost confidence in the euro and the euro area.
All in all, it was a good discussion and we will continue to review the situation very closely as new data comes to the fore.
In the context of national policy measures, Greece informed us about their recently announced and legislated measures, which are relevant for the agreed fiscal path. We aim to discuss this in June on the basis of the third enhanced surveillance report by the Commission. Greece has overachieved on fiscal targets so far, we expect the commitment with the Eurogroup to continue to be respected so that Greece continues to enjoy investors' confidence in the future.
Later on, we considered the further progress on the features of the budgetary instrument for competitiveness and convergence.
Over the past months, we have divided our discussions on the euro area budgetary instrument into three blocks. In recent meetings, we already discussed where to spend the money and the decision making process on the instrument. Today we discussed how to finance it.
The key issue is whether to rely on own resources only or also on so-called “assigned revenues” – with contributions from member states from outside the EU budget. This has important legal and governance implications.
As agreed by leaders, euro area members will provide strategic guidance and criteria. There is broad support to codify this role, but we still need to converge on the appropriate form.
Euro area member states would be involved in the monitoring of the implementation of the instrument by the European Commission.
Building on that discussion, we took stock of all features of the instrument which we have already discussed. Since February, we have made good progress on several key features and options in terms of expenditure, governance, revenues and also the legal codification. A few critical elements are still open but I am confident we will find common ground in June.
Finally, let me recall that in June we aim to deliver not only on the budget instrument but also on the mandate regarding the ESM Treaty change and EDIS and the banking union. It will be another long meeting but I’m sure it will be worth it.
| Council of the European Union | |
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Defence cooperation: Council assesses progress made in the framework of PESCO after first year of implementation
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The Council today discussed PESCO after its first full year of implementation. It adopted a recommendation assessing the progress made by the participating member states to fulfil commitments undertaken in the framework of Permanent Structured Cooperation (PESCO).
The Council underlines that participating member states have made progress in increasing the level of defence budgets and joint defence investment with an increase of the aggregated defence budgets of 3.3% in 2018 and 4.6% 2019. Another positive trend is the fact that participating member states are increasingly using EU tools, initiatives and instruments in national defence planning, such as the revised Capability Development Plan (CDP), the Coordinated Annual Review for Defence (CARD) and the European Defence Industrial Development Programme (EDIDP). They have started preparing for the European Defence Fund which should replace the EDIDP for the period 2021-2027.
The Council invites participating member states to continue to make progress in fulfilling the more binding commitments related to bringing their respective defence systems more in line with each other, in particular to strengthen collaborative capability development. It also encourages them to make further efforts as regards the commitments related to strengthening the availability and deployability of forces, including for military Common and Security Defence Policy (CSDP) operations and missions.
Participating member states are also encouraged to advance the work and focus on the swift and effective implementation of the 34 PESCO projects in which they participate in order to deliver tangible outputs and products. As a high number of PESCO projects respond to EU capability development priorities which also reflect NATO priorities, coherence between EU and NATO respective processes will continue to be ensured. The recommendation also foresees that after 2019, the next call for PESCO projects would take place in 2021.
| Συμβούλιο της Ευρωπαϊκής Ένωσης | |
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Αμυντική συνεργασία: Το Συμβούλιο αξιολογεί την πρόοδο που σημειώθηκε στο πλαίσιο της PESCO μετά το πρώτο έτος εφαρμογής της
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Το Συμβούλιο συζήτησε σήμερα για την PESCO μετά το πρώτο έτος πλήρους εφαρμογής της. Εξέδωσε σύσταση με την οποία αξιολογείται η πρόοδος των συμμετεχόντων κρατών μελών όσον αφορά την εκπλήρωση των υποχρεώσεων που είχαν αναληφθεί στο πλαίσιο της Μόνιμης Διαρθρωμένης Συνεργασίας (PESCO).
Το Συμβούλιο τονίζει ότι τα συμμετέχοντα κράτη μέλη έχουν σημειώσει πρόοδο ως προς το επίπεδο των προϋπολογισμών για αμυντικούς σκοπούς και των κοινών αμυντικών επενδύσεων αυξάνοντας τους συγκεντρωτικούς αμυντικούς προϋπολογισμούς κατά 3,3 % το 2018 και 4,6 % το 2019. Μια άλλη θετική τάση είναι το γεγονός ότι τα συμμετέχοντα κράτη μέλη χρησιμοποιούν όλο και περισσότερο τα εργαλεία, τις πρωτοβουλίες και τα μέσα της ΕΕ στον εθνικό αμυντικό σχεδιασμό, όπως το αναθεωρημένο σχέδιο ανάπτυξης ικανοτήτων (CDP), η συντονισμένη ετήσια επισκόπηση στον τομέα της άμυνας (CARD) και το ευρωπαϊκό πρόγραμμα βιομηχανικής ανάπτυξης στον τομέα της άμυνας (EDIDP). Έχουν αρχίσει να προετοιμάζονται για το Ευρωπαϊκό Ταμείο Άμυνας, το οποίο θα αντικαταστήσει το EDIDP για το διάστημα 2021-2027.
Το Συμβούλιο καλεί τα συμμετέχοντα κράτη μέλη να συνεχίσουν να εκπληρώνουν τις πιο δεσμευτικές υποχρεώσεις τους προκειμένου να ευθυγραμμίσουν καλύτερα μεταξύ τους τα αμυντικά τους συστήματα, ιδίως δε για να αναπτυχθεί περαιτέρω η συνεργατική ικανότητα. Τα ενθαρρύνει επίσης να καταβάλουν περισσότερες προσπάθειες όσον αφορά τις δεσμεύσεις που συνδέονται με την ενίσχυση της διαθεσιμότητας και της δυνατότητας ανάπτυξης των δυνάμεων, συμπεριλαμβανομένων των επιχειρήσεων και των αποστολών της στρατιωτικής κοινής πολιτικής και πολιτικής άμυνας (ΚΠΑΑ).
Τα συμμετέχοντα κράτη μέλη παροτρύνονται επίσης να προωθήσουν το έργο και να εστιάσουν στην ταχεία και αποτελεσματική εφαρμογή των 34 έργων της PESCOστα οποία συμμετέχουν, προκειμένου να παραγάγουν απτά αποτελέσματα και επιτεύγματα. Δεδομένου ότι πολλά έργα PESCO ανταποκρίνονται στις προτεραιότητες της ΕΕ για την ανάπτυξη ικανοτήτων, οι οποίες απηχούν επίσης τις προτεραιότητες του ΝΑΤΟ, θα εξακολουθήσει να εξασφαλίζεται η συνοχή μεταξύ των αντίστοιχων διαδικασιών της ΕΕ και του ΝΑΤΟ. Η σύσταση προβλέπει επίσης ότι, μετά το 2019, η επόμενη πρόσκληση για έργα PESCO θα πραγματοποιηθεί το 2021.
| Council of the European Union | |
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Capital markets union: Council adopts updated rules for financial derivative products and clearing
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The EU will soon have in place simplified rules for non-financial counterparties, small financial counterparties and pension funds using financial derivative products.
The Council today adopted a regulation improving the existing regulatory framework applying to the over-the-counter (OTC) derivative market.
The European Market Infrastructure Regulation (EMIR), adopted in 2012, forms part of the European regulatory response to the financial crisis, and specifically addresses the problems encountered in the functioning of the OTC derivatives market during the 2007-2008 financial crisis.
The regulation adopted by ministers today amends and simplifies EMIR to address disproportionate compliance costs, transparency issues and insufficient access to clearing for certain counterparties.
In particular, it introduces a new category of "small financial counterparties" which will be exempted from the obligation to clear their transactions through a central counterparty (CCP), while remaining subject to risk mitigation obligations. Smaller non-financial counterparties will also have reduced clearing obligations. In addition, the text extends by another two years (further extendable twice by an additional year) the temporary exemption from the clearing obligation of pension scheme arrangements.
The updated rules also streamline the existing reporting obligations in order to improve the quality of the data reported, make the supervision more effective and increase access to clearing by removing existing unnecessary obstacles.
Next steps:
The regulation will be signed in the week of 20 May will enter into force 20 days after its publication in the Official Journal.
| Council of the European Union | |
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Banking Union: Council adopts measures to reduce risk in the banking system
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The EU is putting in place a new framework which will strengthen the banking union and reduce risks in the financial system.
The Council today adopted a comprehensive legislative package which will reduce risks in the banking sector and further reinforce banks' ability to withstand potential shocks.
The package contains amendments to the capital requirement legislation (regulation 575/2013 and directive 2013/36/EU) which reinforce the capital and liquidity positions of banks, and strengthens the framework for the recovery and resolution of banks in difficulty (directive 2014/59/EU and regulation 806/2014).
"Today we have adopted a central piece of Europe's financial reform agenda. It is a stepping stone in the deepening of the Economic and Monetary Union. It also brings the EU in line with its international commitments. Thanks to the introduction of key measures such as the binding leverage ratio for all banks and the introduction of a "total loss-absorbing capacity" for the biggest institutions, banks will be better capitalised and better equipped to withstand market turbulences."
Eugen Teodorovici, Minister of finance of Romania, which currently holds the Council presidency
The proposals implement reforms agreed at international level following the 2007-2008 financial crisis to strengthen the banking sector and address remaining challenges to financial stability. Presented in November 2016, they include elements agreed by the Basel Committee on Banking Supervision and by the Financial Stability Board (FSB).
The package includes in particular the following key measures:
- a leverage ratio requirement for all institutions as well as a leverage ratio buffer for all global systemically important institutions;
- a net stable funding requirement;
- a new market risk framework for reporting purposes, including measures reducing reporting and disclosure requirements and simplifying market risk and liquidity rules for small non-complex banks in order to ensure a proportionate framework for all banks within the EU;
- a requirement for third-country institutions with significant activities in the EU to have an EU intermediate parent undertaking;
- a new total loss absorbing capacity (TLAC) requirement for global systemically important institutions;
- enhanced Minimum Requirement for own funds and Eligible Liabilities (MREL) subordination rules for global systemically important institutions (G-SIIs) and other large banks;
- a new moratorium power for the resolution authority.
The banking package also includes a number of targeted measures to cater for EU specificities, such as incentives for investments in public infrastructures and SMEs or a credit risk framework facilitating the disposal of non-performing loans.
Next steps
Following the signature of the adopted legislation in the week of 20 May, the banking package will be published in the Official Journal in the course of June and will enter into force 20 days later. Most of the new rules will start applying in mid-2021.
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Welcoming remarks by President Donald Tusk at the celebratory dinner marking the 10th anniversary of the Eastern Partnership
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Ten years ago, many of us here contributed to establishing the Eastern Partnership, although some of us in different capacities than today. It was based on the recognition that your countries have their own distinct and unique connections to the European Union, and that this should be given political expression.
Both the idea and the name, Eastern Partnership, were conceived in the Polish ministry of foreign affairs under Radek Sikorski, in close collaboration with our Swedish friends, Carl Bildt in particular.
Dear Mr Speaker, dear Minister, dear Radek. Here, in the presence of all the leaders of the Eastern Partnership and European institutions, I would like to sincerely thank you and congratulate you on this excellent idea. Without your creativity and courage, the Eastern Partnership would not be possible. (these sentences were delivered in Polish) It was my private message to the authors of this idea of Eastern Partnership, especially Radek Sikorski.
The Eastern Partnership has had its successes, its challenges, and also moments of high drama, as in November 2013, during the summit in Vilnius, where President Yanukovych rejected Ukraine’s Association Agreement, which he later bitterly regretted.Today, after ten years, we can reflect on our achievements. Three of the six Eastern Partnership countries have Association Agreements that include deep and comprehensive trade areas. They also have visa-free arrangements with the EU. Billions of euros have been spent on border management, connectivity, environment and energy efficiency, support for business, legal advice, and education. Young people from Partnership countries participate in Erasmus. Much more still needs to be done, but there is no doubt that our partner countries have come closer to the EU, more than our other neighbours.
This means that ten years on, there is more Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine in the EU, and – I believe – there is more EU in all of your countries than ever before. We are not only neighbours – we are members of the same European family.
That’s why I’d like to thank and congratulate all those who have worked so tirelessly to develop the Eastern Partnership. As we celebrate our tenth anniversary, we are making a strong commitment to deepening our ties and cooperation. What kind of Eastern Partnership we will celebrate ten years from now depends on what we do, starting today. And I have trust in our common determination and imagination. So much has changed since we started our work bur not our friendship and determination. Thank you for everything you have done so far.
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