Main results - Economic and Financial Affairs Council, 4 October 2022

 

Meetings Tuesday 4 October 2022

● Council of the EU   04/10/2022 16:04 | MEETING | Main results - Economic and Financial Affairs Council, 4 October 2022   The Council discussed the economic situation and high energy prices. It agreed its position on the REPowerEU proposal and also approved conclusions on climate finance ahead of COP 27. Council of the EU Economic and Financial Affairs Council, 4 October 2022 Main results REPowerEU The Council reached its position (general approach) on the REPowerEU proposal, a plan to phase out the Union’s dependency on Russian fossil fuel imports, which aims to strengthen the strategic autonomy of the Union by diversifying energy supplies and boosting the independence and security of the Union’s energy supply. Today we achieved a major step forward in strengthening Europe’s autonomy from Russia’s fossil fuels. I want to thank my colleagues for agreeing to significant concessions in order to reach this Council compromise position. Given the geopolitical context since Russia started its military aggression against Ukraine, and given the latest attacks on energy infrastructure in Europe, I am sure it is necessary to push for a fast agreement on this proposal. And the Czech Presidency is fully determined to deliver on our promise to radically overhaul the Union’s energy sector and end our dependence on Russian fossil fuel imports.Zbyněk Stanjura, Minister of Finance of CzechiaREPowerEU: Council agrees its position (press release, 4 October 2022) A recovery plan for Europe (background information) Energy prices and security of supply (background information) High energy prices and financial markets Ministers discussed the role of financial markets regarding high volatility of energy prices and potential policy measures, based on a presentation by the Commission. This is part of efforts to prevent a spill-over of risks into the financial system. Ministers pay close attention to energy derivative markets, as many electricity providers are faced with high “margin calls” from so-called “central counterparties” where individual trades are cleared. Margin calls reflect the obligation to provide collateral, usually cash, to offset the performance risk of the derivative transaction. Currently, the margin calls are so high, driven by the large increase of energy prices, that in many cases the energy providers have had to turn to governments to ask for liquidity support, also as banks are unwilling to provide additional loans. The Presidency concluded that the exchange confirmed that most ministers can agree to targeted changes, for example by widening the pool of eligible collateral, and a better use of so-called “circuit breakers” or “price collars”, as well as to adapting the temporary framework for state aid. Work on an additional LNG gas price benchmark to be established by the private sector ahead of the next filling season (before the end of March 2023) was also supported.Energy prices and security of supply (background information) Economic and financial consequences of Russia’s military aggression against Ukraine The Council exchanged views on the economic and financial aspects of Russia’s military aggression against Ukraine. EU economy and finance ministers continue to follow these developments closely. Support for Ukraine and its post-war recovery is a key political priority of the Czech Presidency.EU solidarity with Ukraine (background information) EU relations with Ukraine (background information) EU response to Russia's invasion of Ukraine (background information) Infographic - Recovery fund: the EU deliversSee full infographic NextGenerationEU: National plan of the Netherlands Ministers took stock of the implementation of the Recovery and Resilience Facility (RRF), following a presentation by the European Commission on the state of play. The Council also adopted its implementing decision on the approval of the national plan of the Netherlands. Following the formal adoption of this decision today, the Netherlands is able to use the facility’s funds up to a total allocation of € 4.7 billion in grants. This financing will enable the Netherlands to foster its economic recovery from the COVID-19 pandemic and finance the green and digital transitions. I am very pleased that we decided to support the Netherlands’ recovery plan today. The financing of € 4.7 billion comes at the right moment for them, as it will further strengthen the Dutch economy, making it more resilient in the current energy crisis.Zbyněk Stanjura, Minister of Finance of CzechiaNextGenerationEU: Council gives go-ahead to national plan of the Netherlands (press release, 4 October 2022) A recovery plan for Europe (background information) EU list of non-cooperative tax jurisdictions The EU continues to promote fair tax competition and address harmful tax practices. The Council today decided to add Anguilla, The Bahamas and Turks and Caicos Islands to the EU list of non-cooperative jurisdictions for tax purposes. With these additions, the EU list now consists of 12 jurisdictions: American Samoa, Anguilla, The Bahamas, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, Turks and Caicos Islands, US Virgin Islands, Vanuatu. Fair taxation of businesses benefits all of us. This is why the EU and international partners share a common interest in fighting tax base erosion and profit shifting. I believe all 12 countries on the list will deliver on their commitments and carry out the necessary reforms in the field of taxation as soon as possible, so that they can be deleted from this list when we will next revise it in 6 months time.Zbyněk Stanjura, Minister of Finance of Czechia This updated EU list of non-cooperative tax jurisdictions includes countries that either have not engaged in a constructive dialogue with the EU on tax governance or have failed to deliver on their commitments to implement the necessary reforms. Those reforms should aim to comply with a set of objective tax good governance criteria, which include tax transparency, fair taxation and implementation of international standards designed to prevent tax base erosion and profit shifting.Taxation: Anguilla, The Bahamas and Turks and Caicos Islands added to EU list of non-cooperative jurisdictions for tax purposes (press release, 4 October 2022) EU list of non-cooperative jurisdictions (background information) Code of Conduct Group (Business Taxation) EU customs Ministers exchanged views on the fiscal and non-fiscal role of EU customs. They shared their views on how to find a balance between the great number of new non-fiscal tasks put on customs and the traditional tasks relating to protection of financial interests and the inherent requirement to facilitate trade. They also discussed whether the central role and coordination of customs activities should be strengthened and if so, in which areas. This discussion took place against the background of a substantive evolution of the environment in which customs administrations operate. In recent years security and safety concerns have increased, environmental issues have risen to the fore and a large number of restrictive measures, often implemented by customs on the ground, have been put in place in response to the war against Ukraine. Currently there are more than 350 pieces of legislation, covering inter alia drug precursors, dual use goods, weapons, cash flows, medical products etc. which require customs to check the compliance of products and admissibility of goods entering or leaving the EU. In addition to performing this wide range of control tasks, custom authorities remain responsible for the protection of the EU financial interests. EU customs collect more than € 70 billion annually at the EU border, including customs duties of close to € 25 billion in 2021. Climate finance The Council adopted conclusions on climate finance ahead of UNFCCC COP27. In its conclusions, the Council underlined its strong commitment to deliver on climate finance. The EU and its member states are the world’s largest contributor to international public climate finance, and since 2013 have more than doubled their contribution to climate finance to support developing countries.Climate finance: Council adopted conclusions ahead of COP27 (press release, 4 October 2022) Financing the climate transition (background information) Climate change: what the EU is doing (background information) G20 and IMF annual meetings The Council approved the EU terms of reference for the G20 meeting of finance ministers and central bank governors of 12–13 October 2022 in Washington, DC, and the statement to the International Monetary and Financial Committee (IMFC).G20 website IMF website Daisy Chain regulation The Council adopted a regulation which strengthens the prudential regulatory framework for credit institutions operating in the Union. The ‘Daisy Chain’ regulation introduces targeted adjustments that improve the resolvability of banks. It helps to ensure that banks remain resilient and capable of withstanding shocks. As the economic fall-out of Russia’s aggression against Ukraine shows, it is of key importance to ensure the stability of the European financial sector. The new rules which we have adopted today will ensure that we have stable and resilient banks without imposing a significant increase in capital requirements on them. Even complex banking groups will be better prepared to withstand present and future shocks.Zbyněk Stanjura, Minister of Finance of CzechiaDaisy chains: Council adopted a revised bank resolution framework (press release, 4 October 2022) Single rulebook of the Banking Union (background information) Financial services The Presidency presented the state of play as regards current legislative proposals in the field of financial services. Among others, this concerns anti-money laundering legislation, the Markets in Crypto Assets (MiCA) regulation, as well as the European Green Bonds regulation. In addition, following a presentation by the European Commission, the Council took note of the status of implementation of existing financial services legislation.Progress on financial services legislative files Digital finance (background information) Digital Services Act The Council today gave its final approval to increase the protection of users' rights online through the Digital Services Act (DSA). The DSA sets new standards for a safer and more accountable online environment. It is considered a world’s first in the field of digital regulation: no other legislative act has this level of ambition as regards regulating platforms and online supervision while preserving core principles of the internal market. Following the Council’s approval of the European Parliament's position, the legislative act was adopted.DSA: Council gives final approval to the protection of users' rights online (press release, 4 October 2022) Minimum wages The Council greenlighted a new EU law that will promote the adequacy of statutory minimum wages and thus help to achieve decent working and living conditions for employees in Europe. The directive establishes procedures for the adequacy of statutory minimum wages, promotes collective bargaining on wage setting and enhances the effective access to minimum wage protection for those workers who are entitled to a minimum wage under national law.Council adopts EU law on adequate minimum wages (press release, 4 October 2022) The Council also adopted without discussion the items on the lists of legislative and non-legislative A items. Meeting information Meeting n°3898 Luxembourg 4 October 2022 10:00 Preparatory documentsProvisional list of A items, addition 2 List of A items, legislative deliberations List of A items, non-legislative activities Provisional agenda Background brief Outcome documentsList of participants Meeting voting results