ECOFIN

Baroness Morgan of Cotes Excerpts

Monday 30th June 2014 Written Statements

[The Financial Secretary to the Treasury (Nicky Morgan)]

A meeting of the Economic and Financial Affairs Council was held in Luxembourg on 20 June 2014. The following agenda items were discussed:

Draft general EU budget for 2015

The European Commission presented its draft for the EU’s general budget for 2015. The UK made clear that the European Commission should not be asking for a cash increase to the annual budget of almost 5% compared to the agreed 2014 annual budget at a time when countries across Europe continue to take difficult decisions to deal with deficits.

Parent Subsidiary Directive

Council agreed an amending directive to the parent subsidiary directive, which will effectively close a tax loophole whereby companies operating across Europe could exploit differences between member states in the tax classification of certain financial instruments in order to reduce their overall tax liability.

Current Legislative Proposals

The presidency provided an update on the ongoing work on financial services.

Level 2 legislation on bank contributions under Bank Recovery and Resolution Directive and the Single Resolution Mechanism

The Council discussed the preparation of implementing legislation that will determine the contributions to be paid by banks to resolution funds established under the directive on Bank Recovery and Resolution (BRRD) and the regulation on the Single Resolution Mechanism (SRM).

Code of Conduct (Business taxation)

Ministers endorsed the report on business taxation prepared by the code of conduct group, and adopted the report’s conclusions.

European Semester 2014

Ministers approved recommendations for 26 member states and the euro area as a whole, in preparation for discussions at European Council on 26 and 27 June, and subsequent adoption at ECOFIN on 8 July.

Implementation of the Stability and Growth Pact

Council adopted decisions bringing to an end excessive deficit procedures for six member states.

Ministers endorsed terms of reference on the review of the methodology for assessing effective action in the context of the excessive deficit procedure.

Joint ECB and Commission Convergence Reports (including euro area enlargement)

Euro area member states adopted a recommendation on the adoption of the euro by Lithuania, in preparation for discussions at European Council on 26/27 June, and formal adoption at ECOFIN on 8 July.