ΕUROGROUP, COUNCIL OF THE EUROPEAN UNION update

 

Meetings Wednesday 8 November 2023

● Eurogroup   08/11/2023 22:30 | MEETING | Main results - Eurogroup, 8 November 2023   The Eurogroup discussed the macroeconomic and budgetary outlook for 2024 and the state of play of the competitiveness of the euro area. Ministers took stock of the health and resilience of the banking system and continued their exchange of views on the future of the European capital and financial markets.

Meetings Thursday 9 November 2023

● Council of the EU   09/11/2023 11:25 | MEETING | Economic and Financial Affairs Council (Budget), 10 November 2023   Background brief - Economic and Financial Affairs Council (Budget), 10 November 2023

Press material Thursday 9 November 2023

● Council of the EU   09/11/2023 09:25 | Press release | Air quality: Council ready to start talks with Parliament on new rules to strengthen standards in the EU   Today the Council adopted its negotiating mandate for talks with the European Parliament on a proposal to set EU air quality standards to be achieved by 2030 and to put the EU on a trajectory closer to its zero-pollution vision for air by 2050. It also seeks to align EU air quality standards more closely with World Health Organization (WHO) guidelines. The negotiating mandate, which was agreed at Coreper level, sets out the Council’s position for the start of negotiations (‘trilogues’) with the Parliament to shape the final text of the legislation. "Each year, we see around 300 000 premature deaths due to air pollution in Europe. This is unacceptable; we must act now. With today’s agreement, we are setting the basis for cleaner air and a healthier environment in the EU, with improved standards and more effective action to tackle air pollution. This is not just a piece of legislation; it is a testament to our dedication to the well-being of our citizens and our responsibility towards the planet." Teresa Ribera Rodríguez, acting Spanish third vice-president of the government and minister for the ecological transition and the demographic challenge Main changes agreed by the Council The Council’s text strikes a balance between, on the one hand, keeping the Commission proposal’s main ambition of improving air quality standards in the EU and moving closer to realising the 2050 zero-pollution objective and, on the other hand, introducing some flexibility for member states in the implementation of the directive. Strengthening air quality standards In addition to setting out air quality provisions to move the EU closer to achieving the zero-pollution objective for air quality by 2050, thus contributing to a toxic-free environment, the new rules set out enhanced EU air quality standards for 2030 in the form of limit and target values that are closer to WHO guidelines. The revised directive covers a host of air-polluting substances, including fine particles and particulate matter (PM2.5 and PM10), nitrogen dioxide (NO2), sulphur dioxide (SO2), benzene, arsenic, lead and nickel, among others. For instance, the annual limit values for the pollutants with the highest documented impact on human health, PM2.5 and NO2, would be reduced from 25 µg/m³ to 10 µg/m³ and from 40 µg/m³ to 20 µg/m³ respectively (the WHO guideline values are 5 µg/m³ for PM2.5 and 10 µg/m³ for NO2). The Council’s text adds some flexibility with regard to the attainment of the air quality limit values for areas where compliance with the directive by the deadline would prove unachievable due to site-specific dispersion characteristics, adverse climatic conditions or transboundary contributions. For these reasons, to which the Council added that of a high share of low-income households if the member state in question has a lower national GDP per capita than the EU average and if modelling applications results show that the limit values cannot be attained within the attainment date, member states can request a postponement of the deadline for a maximum of 10 years until no later than 1 January 2040. Air quality plans and short-term action plans The text requires member states to establish air quality plans for areas where the levels of pollutants exceed the limit and target values set out in the directive, and to do so no later than three years after those levels have been recorded. The plans must set out appropriate measures to keep the exceedance period as short as possible and contain information such as the geographic location of the area concerned, the origin of the pollution, and the competent authorities responsible for the development and implementation of the plans. Member states will also be required to set alert or information thresholds for certain air pollutants, to protect the general population and more vulnerable groups from exposure to elevated concentrations of such pollutants. Where there is a risk of those thresholds being exceeded, member states should prepare short-term action plans setting out emergency measures to reduce the immediate risk to human health. The Council proposes more flexibility with regard to the assessment of ambient air quality, for example that the use of modelling applications as a complement to fixed measurements should not be mandatory in the event of limit values set out in the directive being exceeded. The proposed new directive would also oblige member states to establish at least one monitoring supersite on their territory, based on population and size. These monitoring supersites would combine multiple sampling points to gather long-term data on air pollutants covered by the directive, as well as on air pollutants of emerging concern and other relevant metrics. Review clause The Council’s text calls on the European Commission to review the air quality standards by 2030 and as frequently as necessary thereafter, to assess whether they need to be updated based on the latest scientific information. In its review, the Commission should also consider whether more air pollutants need to be covered, and whether additional postponement of the deadlines or adjustments to transboundary air provisions should be considered. Based on its review, the Commission should then put forward proposals to revise air quality standards, include other pollutants and/or propose further action to be taken at EU level. Transboundary pollution Often, air pollution is not limited to an individual member state but spreads across borders. To address the transboundary nature of some pollutants, such as ozone and particulate matter, the Council strengthened the provisions related to transboundary pollution. The new rules require member states to cooperate with each other to identify the sources of air pollution and the measures necessary to address them, and to plan joint activities, such as the preparation of coordinated national air quality plans. The Council added a provision to allow member states to identify and notify the Commission of exceedances of air quality limits that can be ascribed to sources outside the influence of the member state affected. Such information would then be taken into account by the Commission when assessing the possible postponement of attainment deadlines. Access to justice and right to compensation The proposed directive sets out provisions to ensure access to justice for those who have a sufficient interest and want to challenge its implementation, including environmental NGOs. Any judicial review procedure should be fair, timely and not prohibitively expensive. Under the new rules, member states would have to ensure that people are entitled to claim and obtain compensation where damage to their health has occurred as a result of an intentional or negligent violation of the national rules transposing certain provisions of the directive. The proposal as amended by the Council also requires member states to establish effective, proportionate and dissuasive penalties for those who infringe the measures adopted to implement the directive. Such penalties would have to take into account the severity and duration of the infringement, whether it is recurrent, and the people and environment affected by it.

Press material Thursday 9 November 2023

● Council of the EU   09/11/2023 13:46 | Press release | Recovery fund: Council greenlights updated national plans for Denmark, Lithuania, Austria and Sweden   The Council today adopted implementing decisions approving the amended recovery and resilience plans of Denmark, Lithuania, Austria and Sweden. The amended recovery and resilience plans now include a new REPowerEU chapter. This will contribute to accelerating the countries’ transition towards clean energy, diversifying their energy supplies and improving their energy efficiency. To finance the increased ambition of their plans, Denmark, Lithuania and Sweden have requested to transfer their share of the Brexit Adjustment Reserve (BAR) to the plans, in line with the REPowerEU Regulation. According to the analysis of the Commission, the modifications put forward by the member states do not affect the relevance, effectiveness, efficiency and coherence of their recovery and resilience plans. Denmark On 31 May 2023, Denmark submitted its amended recovery and resilience plan, which includes a new REPowerEU chapter. The total financial contribution available to Denmark will now be €1.63 billion in grants. Denmark has not requested loans. The modified plan has a stronger focus on the green transition, devoting 69% (up from 59% in the original plan) of the available funds to measures that support climate objectives. The plan remains ambitious in the digital sphere too, allocating 27% (up from 25% in the original plan) of its total allocation to support the digital transition. Lithuania On 30 June 2023, Lithuania submitted a modified national plan, including a REPowerEU chapter. The modified plan has a strong focus on the green transition, devoting 37.4% of the available funds to measures that support climate objectives. The plan is now worth €3.85 billion (€2.3 billion in grants and €1.55 billion in loans) which is nearly double the size of the initial recovery and resilience plan. Lithuania’s revised plan also reinforces its digital ambition and social dimension. Austria On 14 July 2023, Austria submitted a modified national plan, including a REPowerEU chapter. The modified plan has a significant focus on the green transition, allocating 56% of available funds to measures that support climate objectives. The plan's digital ambition and social dimension remain strong. The plan will now benefit from €3.96 billion in grants. Sweden On 14 July 2023, Sweden submitted a modified recovery and resilience plan, including a new REPowerEU chapter. The modified plan has a strong focus on the green transition, allocating 43.6% of available funds to measures that support climate objectives. The plan’s level of digital ambition increases slightly and its social dimension remains strong. The EU contribution to the plan is now worth €3.45 billion in grants. Background The recovery and resilience facility (RRF) is the EU’s programme of large-scale financial support in response to the challenges the pandemic has posed to the European economy. It is the centrepiece of NextGenerationEU, a temporary recovery instrument that allows the Commission to raise funds to help repair the immediate economic and social damage caused by the COVID-19 pandemic. To benefit from the facility’s €724 billion (in current prices), member states submit recovery and resilience plans (RRPs) to the Commission, setting out the reforms and investments they intend to implement by the end of 2026. To date, all RRPs have been approved, 39 payment requests have been received from 22 member states, and €174.7 billion have been disbursed. Regulation 2023/241 as regards REPowerEU chapters, in force since 1 March 2023, increases the RRF financial envelope by €20 billion in new grants. In addition, member states are able to voluntarily transfer up to €5.4 billion from the Brexit Adjustment Reserve to the RRF to finance REPowerEU measures. This comes on top of the existing transfer possibilities of 5% from the cohesion policy funds (up to €17.9 billion). During 2023, it is expected that gradually each of the 27 member states will submit amendments to their national recovery and resilience plans at least once, to access the new REPowerEU grants, to request available loans, or to take into account the updated RRF allocation. Council implementing decision amending the recovery and resilience plan for Denmark Council implementing decision amending the recovery and resilience plan for Lithuania Council implementing decision amending the recovery and resilience plan for Austria Council implementing decision amending the recovery and resilience plan for the Sweden A recovery plan for Europe (background information) REPowerEU: energy policy in EU countries’ recovery and resilience plans (background information)

Press material Wednesday 8 November 2023

● Eurogroup   08/11/2023 22:17 | Statements and remarks | Remarks by Paschal Donohoe following the Eurogroup meeting of 8 November 2023   I began the Eurogroup meeting by recalling that it is now the 30th anniversary of the entry into force of the Maastricht Treaty. Leaders 30 years ago laid down concepts and approaches that we have looked to build upon in the three decades since then. I used that framework to look at where we are now with regard to economic policy, our work on the banking union and capital markets, and then, of course, the work that is underway now with regard to economic governance. That treaty marked an obviously fundamental moment in European integration - it laid the way for a single currency, it established the European Central Bank, and it laid down the early stage in the rules that are now such a big part of our monetary union. It has also, over those 30 years, been a reminder to us that the course of economic and monetary union is, to put it mildly, not a long and tranquil river. It's a permanent dialogue with lots of change, lots of evolution, and lots of challenges. And of course our ability to deal with all of that is our collective will and our respect for our common engagement. And that is why the Eurogroup and the work that we do each month is so important to the economic and monetary union. We therefore began our meeting with an update on the economic situation and the risks that we see, particularly from developments that are taking place elsewhere in the world. The incoming data demonstrates that headline inflation is coming down and that our labour markets continue to be resilient. But we have also seen a confirmation of some loss of momentum in our economy and we will be receiving from the Commission their updated view on these indicators when they issue their Autumn forecast. All that being said, the euro area continues to remain resilient and there is no reason to expect a deep or a protracted recession. The Commission will also be issuing its opinions on our draft budgets for next year. We'll be looking at these in detail in our next meeting when we aim to issue a Eurogroup statement, and our discussion today was a good opportunity to get ready for that. Building on this, we then had a broad discussion on the key competitiveness challenges that will forge future living standards in the euro area. We are aware of all of the factors that influence our productivity, that influence investment, that influence innovation within the euro area economy. The Commission gave us an assessment and a very thoughtful paper on where we stand on our current levels of competitiveness, and where we stand with regard to the policy areas that will influence our future levels of competitiveness. As a discussion takes place across the European Union on the level of competitiveness that we enjoy within the global economy, how it is changing, and what needs to be done, I'm committed to making sure the Eurogroup and finance ministers have a voice in that debate and that their views regarding what we need to do in the future for our economies is made clear and emphasised. After this, we moved to the Eurogroup in banking union format. We welcomed our Bulgarian colleague and we also welcomed the chairs of the Single Resolution Mechanism and the Single Supervisory Mechanism. They presented to us the reports that we receive twice a year on their supervisory and resolution activities. We then held a very open discussion on the challenges ahead for our banking sector and how the institutions intend to address them. We acknowledged the good health of our banking and financial system, which has proved its resilience in the face of several shocks as they have boosted their capital and their liquidity position. This is a result of the decisive action that has been taken at the European level. The Single Resolution Fund, which is a key pillar of our EU Crisis Management toolkit, has now reached an important milestone as it has now reached its target capacity. We also recognised the new challenges that could await, given what is happening across the world, changes in our rate of economic growth and the consequences of higher interest rates. We also discussed the implications of these developments for the profitability of banks. So looking ahead, all of this was a reminder to us of the importance of dealing with unfinished and really important business. First, ensuring that the ESM can provide the liquidity backstop to the Single Resolution Fund as planned in the reforms that we agreed to, and second, striking a final agreement on the reform of the crisis management framework, as we agreed in June 2022. The legislation from that agreement, of course, is now being debated under the Spanish presidency. We then wrapped up our meeting in inclusive format with all 27 member states present. We discussed the future of European capital and financial markets. This follows the approach that we agreed back in May, where we are now exploring drivers of economic progress and possible solutions and steps that can be taken to develop our capital markets. Our aim is to reach a common view on those steps to invite the Commission to take action on them in the time ahead. In order to inform this discussion, we've now had a range of private sector guests. Today we welcomed two more. We had Trond Grande, the deputy CEO of the Norwegian Government Pension Fund, presenting their investment strategy of what is the largest fund of its kind in the world. And then we had Ronald Wuijster, CEO of APG Asset Management, who explained the Dutch pension funds' role and how they channel household savings into productive investment. They gave us real, tangible, practical ideas about how capital markets can be attractive, how they can play a bigger role with regard to future growth and how they can be more attractive for citizens investing their savings into, for example, a greener economy in the decades ahead. We all know there's a massive potential to boost retail and institutional investment within the European Union, and the Commission already has really important initiatives underway with regard to this. We want to build on that work and look at how we can take it to the next level. So next month we're going to be completing this phase of our work and after that, we'll move on to the third and final phase of our work on capital and financial markets, where we're able to reach agreement amongst ministers on those areas upon which we would invite further action.