Banking Union
The Council endorsed the result of negotiations with the European Parliament on a set of key risk reduction measures of the so-called "banking package".
The measures deliver on three key objectives set out by the Council roadmap on completing the banking union agreed in June 2016:
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setting out an enhanced framework for bank resolution
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introducing the possibility for resolution authorities to suspend banks' payments when it is under resolution
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strengthening bank capital requirements, by including a binding leverage ratio, a binding net stable funding ratio and setting risk sensitive rules for trading in securities and derivatives.
The endorsement paves the way to making further progress in the sharing of risk within the EU’s banking union.
Banking Union: Council endorses package of measures to reduce risk
The Commission also reported on work to implement the Council's July 2017 action plan on non-performing loans (NPLs) in the banking sector. The report shows overall NPL levels to have dropped from nearly €1 trillion at the end of 2016 to €82 billion according to the latest figures. The ratio of NPLs in proportion to total bank loans has decreased from 5.4% in June 2016 to 3.4%. However, NPL ratios remain uneven across the EU – ranging from 0.6 % to 44.9 % – and slow progress in some member states remains a source of concern.
Finally, the Council discussed a report assessing progress in technical discussions on the European deposit insurance scheme.
Commission's third report on the reduction of non-performing loans
November 2018 presidency progress report on EDIS
Digital taxation
Ministers held a public policy debate on the proposal to establish a digital services tax.
The proposal, published by the Commission on 21 March 2018, as part of a "digital taxation package" is meant as an interim solution aimed at addressing the most urgent gaps in the taxation of digital activities, while ensuring a level playing field for all businesses.
Following a thorough analysis of all technical issues, the presidency put forward a compromise text containing the elements that have the most support from member states. However, at this stage a number of delegations cannot accept the text for political reasons as a matter of principle, while a few others are not satisfied yet with some specific points in the text. That text did not gain the necessary support and was not discussed in detail.
Ministers examined a joint declaration by the French and German delegations. The presidency recommended that the Council working group continues working on the basis of the latest Presidency compromise text and the elements proposed by France and Germany, with the aim of reaching an agreement as soon as possible.
Franco-German joint declaration on the taxation of digital companies and minimum taxation
November 2018 presidency note on the digital services tax
November 2018 presidency compromise text on the digital services tax
Anti-money laundering
The Council adopted conclusions on an action plan to better tackle money laundering and terrorist financing.
The conclusions set out a number of short-term non-legislative actions to enhance the supervision of anti-money laundering activities and encourage cooperation between competent authorities.
Money laundering: Council adopts conclusions on an action plan for enhanced monitoring
Taxation
The Council adopted three short legislative acts aimed at adjusting some of the EU's VAT rules in order to fix four specific issues pending the introduction of a new VAT system.
VAT: Council adopts short-term fixes to current EU system (press release, 04/12/2018)
Ministers also endorsed a report to the European Council on tax issues, as well as a report by the Code of Conduct group on business taxation, together with Council conclusions, which also addresses cooperation with jurisdictions outside the EU.
Stability and Growth Pact
The Council took stock of the ongoing significant deviation procedures of Hungary and Romania. Ministers issued decisions confirming that effective actions have not been taken, as well as new recommendations on measures to take to correct the deviations.
Ministers also initiated the annual 'European Semester' process for the monitoring of the member states' economic, employment and fiscal policies, on the basis of a presentation by the Commission.
Remarks by Vice-President Valdis Dombrovskis at the ECOFIN press conference
[...]Today ministers confirmed the key political elements for the deal on the banking package.
On this basis, after this press conference, the Minister and I will attend the final trialogue to seal the agreement on the banking package.
This is a flagship legislative package. By implementing internationally agreed standards into EU law, the package contains important risk reduction measures. And it will make the European banking system stronger and safer.
From a political point of view, this agreement is also crucial for the upcoming leaders' debate on further risk sharing measures.
So congratulations to the Presidency on their exceptional leadership on this very complex file!
We also welcome the Council's conclusions on an Anti-Money Laundering Action Plan.
We welcome Member States' call to transpose the 5th Anti-Money Laundering Directive ahead of the 2020 deadline. We share this objective.
Work is ongoing on our recent proposal from 12 September, which aims to strengthen anti-money laundering supervision for a stable banking and financial sector.
Europe has the strongest anti-money laundering rules in place.
But recent cases in the banking sector showed that they are not always supervised and enforced with the same high quality standards across the EU.
So we need to enable the European Banking Authority to make sure that different national supervisors cooperate and exchange information.
And that the anti-money laundering rules should be enforced effectively across EU countries.
Today ministers also requested the Commission to propose longer term actions to bring further improvements in the prudential and anti-money laundering frameworks.
And we will present this assessment to the Council at latest in the third quarter of next year.
Today we also presented the 2019 European Semester package. Ministers broadly shared our analysis that our strategy based on investment, structural reforms and fiscal responsibility is working.
But the situation differs from country to country. In some countries important reforms are still outstanding and public debt level remains high, reducing the room for manoeuvre in case of future shocks.
We are now in good economic times, but we cannot ignore the risking risks and global uncertainty. So the time to act is now.
At the national level, we need reforms to increase productivity growth and to ensure that growth is inclusive.
Member States must use the good times to reduce debt where it is high and to rebuild fiscal buffers.
At the EU level, it is time to decide on further strengthening of our Economic and Monetary Union. In that sense decisions taken last night in the Eurogroup are very timely.
Ministers also adopted the Commission's recommendations for the next steps under the Significant Deviation Procedure for Hungary and Romania. Both countries are recommended to do additional efforts to put their budget trajectories back on track.
The Council also discussed the proposed Digital Services Tax, including the compromise text by the Austrian Presidency and the Franco-German declaration.
On this basis, we hope that Member States can forge a compromise as soon as possible in 2019 under the Romanian Presidency. And the Commission stands ready to assist with technical work where necessary.
From the point of view of the Commission, it continues to be unacceptable that digital companies continue to pay less than their brick and mortar equivalents.
This is why we will continue to look for long term solutions to ensure fair taxation of the digital economy at EU level and at global level. To that end, we are working hand-in-hand with the OECD and G20.
I also presented ministers with the progress made in reducing the Non-Performing Loans in European banks. And as you know, overall results are encouraging as the European average stood at 3.4% in June 2018, down from 4.6% a year earlier.
Furthermore, I am glad to announce that the ice has started moving on the Capital Markets Union, also thanks to the perseverance of the Austrian Presidency and to committed rapporteurs at the European Parliament where we had some important votes yesterday.
And I would like to thank the Austrian Presidency for balanced compromises reached on covered bonds and supervision of Central Counterparties, among other files, which the Minister already mentioned. Because many proposals are still pending.
So we invite the European Parliament and Member States to accelerate their work to lay the building blocks of the Capital Markets Union by the end of the current mandate.
Deep and liquid capital markets are crucial for strengthening the international role of the euro. So is a strong Economic and Monetary Union. The European Commission will present tomorrow our communication and accompanying documents on the international role of euro. [...]
Full remarks
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