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6 December 202217:00
ECOFIN: Ministers debate financial assistance to Ukraine, a revision of fiscal rules and a recovery plan for Hungary
© EU
Today in Brussels, EU finance ministers led by Zbyněk Stanjura discussed the continuation of macro-financial assistance to Ukraine worth EUR 18 billion next year. They also opened a debate on the European Commission’s report on a possible revision of European fiscal rules and adopted a joint declaration calling on the European Parliament to reduce staff spending.
"It is no secret that the approval of EUR 18 billion in new assistance to Ukraine for next year, the Hungarian national recovery and resilience plan, Pillar Two of the OECD agreement and minimum corporate tax rates are linked. They are a package dependent on how Hungary continues in its reforms in the field of public procurement control," said Minister of Finance Zbyněk Stanjura.
A European Commission report of 30 November assessed Hungary’s progress in adopting legislation to protect funds from EU budgets. In it, although the Commission proposed blocking Hungary’s access to EU structural funds of EUR 7.5 billion due to insufficient reforms, it concurrently approved the Hungarian recovery and resilience plan of EUR 5.8 billion. However, the Commission made the disbursement conditional on the continuation of introducing reforms in this area.
"I am aware of the ongoing reform process in Hungary, which is evolving on a daily basis, and this is why we called the Commission to update its assessment today. Hungary is ready to fully cooperate in this task. The goal is to find a compromise based on the updated report within only a few days," Zbyněk Stanjura explained, adding: "After that it is already a procedural matter, and we will probably convene an extraordinary Ecofin videoconference and approve the entire package of measures by the end of the year."
The finance ministers today approved an amendment to the financial regulation based on which the European Commission may commence steps leading to securing EUR 18 billion for Ukraine. "Our priority remains providing Ukraine with this money at the start of January. I think that the credibility and reputation of the whole of the Union depends on this, and that we cannot afford further procrastination," Zbyněk Stanjura emphasised.
The finance ministers also discussed a revision of the Energy Taxation Directive. The majority of Member States supported the direction given by the Czech Presidency comprising greater flexibility to reflect the national specifics of taxation systems. The debate from the informal ECOFIN meeting in Prague regarding the revision of fiscal rules based on the European Commission economic governance review also continued.
"The escape clause from the Stability and Growth Pact will be extended for the third year. This means that nobody has to comply with the European rules and that nobody checks they are being observed. Yet it is not enough to blame the crisis because we have been going through a crisis for the last 13 years. The result is a dramatic deepening of public debts in the EU, which we cannot continue to ignore," Zbyněk Stanjura said, adding: "After the end of our Presidency, I will support our Swedish colleagues in seeking an agreement, as soon as possible, on new fiscal rules that will be transparent, binding and, above all, enforceable."
The finance ministers ended by adopting a declaration in which the EU Member States called on the European Parliament to reduce staff expenditure in the coming years. "With the current growing pressure to make savings across expenditure, I consider it essential that EU institutions also tighten their belts and that, in particular, the European Parliament reduces its non-essential staff costs to the bare minimum," Zbyněk Stanjura concluded.
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Economic and Financial Affairs Council, 6 December 2022
Main results
At the end of the meeting, Zbyněk Stanjura, Minister for Finance of Czechia and current chair of the Council in Ecofin formation, handed over the chairmanship to Elisabeth Svantesson, Minister for Finance of Sweden. Sweden takes over the Presidency of the Council in January 2023Financial support to Ukraine
The Council discussed a legislative package on €18 billion in financial support to Ukraine. It adopted one of the three pieces of legislation which aim to provide for a structural solution to financially support Ukraine in 2023.An amendment to the financial regulation, allowing the financing of the macro-financial assistance to take place within the so-called diversified funding strategy.
It did not adopt the remaining items in the package:An amendment to the multiannual financial framework, allowing the use of the headroom to guarantee the borrowing for Ukraine in the years 2023 and 2024.
The macro-financial assistance + instrument (“MFA+ instrument”) which creates the framework to provide the support to Ukraine, including the areas of support and the conditions for Ukraine to benefit from that support.
Ukraine needs our help urgently. There was a clear political will expressed in the room today on our determination to help Ukraine, also financially. I am pleased that we have adopted at least one of the three financial measures, for which a qualified majority was required. The Commission can now start the process of borrowing funds so that we can provide financial support to Ukraine in early January. I am sure that we cannot afford any more delays.Zbyněk Stanjura, Minister for Finance of CzechiaRecording of the discussion
EU solidarity with Ukraine (background information)
EU relations with Ukraine (background information)
Economic governance review
The Commission presented its communication on the economic governance review. This was the first opportunity for ministers to have a discussion on the Commission’s communication. Ministers shared their initial positive observations, voiced their remaining questions and concerns, and looked forward to constructive discussions on the various aspects of the suggested reforms in the coming months, in order to provide the Commission with the political backing it needs for its next steps. Discussions will now continue at the level of experts.Economic governance framework (background information)
Economic recovery in Europe
The Council took stock of the implementation of the Recovery and Resilience Facility, following a presentation by the Commission on the state of play.
The Recovery and Resilience Facility is the EU’s programme of large-scale financial support in response to the challenges the pandemic has posed to the European economy. The facility’s €672.5 billion are used to support the reforms and investments outlined in the member states’ recovery and resilience plans.A recovery plan for Europe (background information)
Energy taxation
Ministers held a policy debate on the revision of the energy taxation directive. They welcomed the progress made and expressed their commitment to continue work towards reaching an agreement as soon as possible.Recording of the discussion
Presidency note
Energy prices and security of supply (background information)
Fit for 55 (background information)
EU’s new own resources
The Presidency presented its report on the discussions on new own resources for the Union.Recording of the presentation
Presidency report
EU budget (background information)
Current financial services legislative proposals
The Presidency presented the state of play as regards legislative proposals in the field of financial services.Recording of the presentation
Progress on legislative files in the area of financial services
Digital finance (background information)
Capital Markets Union (background information)
European Semester 2023
The Commission presented the annual sustainable growth survey 2023, the alert mechanism report 2023 and its recommendation for a Council recommendation on the economic policy of the euro area.European Semester (background information)
EU budget for 2023
As a follow-up to the adoption of the EU budget for 2023, the Council agreed a statement on heading 7 which concerns administrative expenditure of the EU institutions.EU budget (background information)
Implementation of the EU budget in 2021
The President of the European Court of Auditors presented the annual report on the implementation of the budget for the financial year 2021.EU spending: auditors find increased errors (European Court of Auditors)
EU budget (background information)
Business taxation: Code of Conduct group
As an item without discussion, the Council approved conclusions on the progress achieved by the Code of Conduct Group.Council approves conclusions on the progress achieved by the Code of Conduct Group (business taxation) in the second half of 2022 (press release, 6 December 2022)
EU list of non-cooperative jurisdictions (background information)
Code of Conduct Group (business taxation) (background information)
Report to the European Council on tax issues
As an item without discussion, the Council approved its report to the European Council on tax issues. Economy and finance ministers report to the European Council on tax issues twice a year.Report
Taxation (background information)
EU budget: rule of law conditionality mechanism
Over breakfast, the Council discussed the proposal for a Council implementing decision on measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary. Ministers used this opportunity to give a first reaction to the assessment of remedial measures taken by Hungary, which the Commission published on 30 November. The Council’s deadline for its decision on the measures is 19 December.Communication from the Commission to the Council on the remedial measures notified by Hungary for the protection of the Union budget
Long-term EU budget 2021-2027 and recovery package (background information)
EU budget (background information)
New internationally agreed rules aim for a fair and effective taxation for multinational groups
Taxation: global minimum level of taxation (Pillar 2)
Over breakfast, the Council discussed a directive on ensuring a global minimum level of taxation for multinational groups in the Union.Digital taxation (background information)
The Council also adopted without discussion the items on the list of non-legislative A items.
Meeting information
Meeting n°3918
Brussels
6 December 2022
10:00
Preparatory documentsBackground brief
Provisional agenda
List of A items, non-legislative activities
Outcome documentsList of participants
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