Economic and Financial Affairs

The Ecofin Council

The Economic and Financial Affairs Council, commonly known as the Ecofin Council, is composed of the Economics and Finance Ministers of the Member States. The Budget Ministers also participate when budgetary issues are discussed.

The Ecofin Council is one of the oldest and most influential configurations of the Council due to the scope and importance of issues within its jurisdiction. The Ecofin is responsible for economic policy coordination, monitoring of Member States’ budgetary policy and public finances, as well as legal and practical aspects of the common currency. It makes decisions on financial and capital market issues and adopts EU legislation in the area of taxation. In addition, it provides economic perspective on important topics from other policy fields such as migration or climate change. The Ecofin also shapes economic relations with third countries and seeks to ensure that Europe speaks with one voice at international forums such as the International Monetary Fund. The Ecofin Council prepares and adopts every year, together with the European Parliament, the budget of the European Union.

The Ecofin Council decides mostly by qualified majority, in consultation or co-decision with the European Parliament. Taxation matters are an exception, since unanimity is required.

The Ecofin normally holds meetings once a month, in either Brussels or Luxembourg. The budget Ecofin meets twice in the second half of the year to discuss the EU budget for the next year.

The Eurogroup, composed of ministers from the euro area countries, i.e. Member States that have introduced the common currency, meets one day before the Ecofin meeting. It is an informal body that deals with issues relating to the euro area. When the Ecofin Council examines dossiers related to the euro, only representatives of the euro area members take part in the vote.

Every Presidency traditionally holds an informal meeting of EU economics and finance ministers in its own country. At this meeting ministers are joined by governors of central banks. The Czech Republic will organize the informal Ecofin meeting in Prague in April 2009.

Priorities of the Czech Presidency in the ECOFIN Council in the first half of 2009

In the Economic and Financial Affairs Council (ECOFIN Council), the Czech Presidency will pay particular attention to:

  • the search for efficient ways to address the current economic slowdown with the aim of bringing the EU economies back on a growth path as soon as possible;
  • the restoration of normal functioning of financial markets and the reinforcement of financial stability;
  • an efficient coordination of economic and financial policies while respecting the rules and objectives set out in the Stability and Growth Pact and the Lisbon Strategy
  • the removal of obstacles to the functioning of the internal market, and its modernisation and adaptation to new conditions, especially in the field of financial services and taxes.

On 1 May 2009, it will be five years since the biggest EU enlargement to date. The Czech Presidency will use this anniversary to reflect on the benefits and costs of enlargement for the economies of the new and old Member States and the EU as a whole.

Economic policy and public finances

The Czech Presidency will focus on the current economic crisis and the coordination of policies to restore growth and support employment. At the beginning of the year, the Presidency will lead the debate on key challenges for 2009 in the field of economic and budgetary policies as well as in the field of financial stability. Within the scope of the annual evaluation of stabilisation and convergence programmes and progress in the implementation of the Lisbon Strategy, the Czech Presidency will look for ways to respond to the current economic difficulties while not jeopardising macroeconomic stability and fiscal sustainability in the long term, The Czech Presidency will also pay attention to the economic ramifications of population ageing and changes in the structure of public expenditure.

Under the Czech Presidency the Ecofin Council will evaluate the progress in the realisation of the single market and in the reduction of the administrative burden for companies. It will also discuss economic and financial aspects of the fight against climate change.

Financial services

The Czech Presidency will closely follow the developments on the financial markets and if need be, coordinate European responses intended to support the financial sector. It will give priority to the strengthening of the EU’s financial stability in order to prevent future crises. Therefore, the Presidency will carry on with the implementation of initiatives that have already been launched and lead the debate on other changes that are needed in the field of European financial market regulation. It will strive to finalise the discussions on directives reviewing the prudential framework in the banking sector (the Capital Requirements Directives) and in the insurance sector.(Solvency II). The Czech Presidency will also ensure the preparation of common Europea positions on the reform of the global financial system and promote these positions in international negotiations. The Presidency also wishes to remove further obstacles to the easy and safe cross-border provision of financial services to retail consumers and, more particularly, will address the levelling of the playing field for the distribution of substitute investment products.

Taxes

A key priority of the Czech Presidency will be the fight against tax evasion and tax avoidance. In the field of VAT, attention will be paid to measures to improve tax management and administrative cooperation between Member States. There will be further discussion on the review of taxation of savings income, expected to prevent tax fraud in this area. The Presidency will also seek to modernise and simplify existing taxation rules, especially by focusing on the amendment of the directive on the taxation of tobacco products. It will try to achieve progress in negotiations on proposals providing for value added tax (VAT) on financial and insurance services.

EU budget

The Czech Presidency will put an emphasis on the consistent compliance with principles of sound financial management and strict budgetary discipline. These principles will be promoted both in relation to the implementation of the EU budget for 2009 and in the preparation of Council priorities for the 2010 budget. Particular attention will be paid to the procedure for granting budget discharges and the debate on the methods that would enable the European Court of Auditors to issue a positive verdict on the management of EU financial resources.

Last update: 16.8.2011 16:02

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