Main results of the Council

The Council agreed on a package of new VAT arrangements for services, reaching a compromise on provisions for telecoms, broadcasting and electronic services.

The Council adopted conclusions dealing with:

– annual multilateral surveillance in the context of the national economic reform programmes presented by the member states under the Lisbon strategy on growth and jobs;

– the economic impact of migration;.

– a review of the Lamfalussy regulatory process for financial services;

– barriers to the development of European risk capital markets;

– measures to combat tax fraud;

– work on harmful competition with regard to business taxation.

It also reached agreement on a recast directive on capital duty.

Council Conclusions

FINANCIAL SERVICES

Review of the Lamfalussy process (excerpt)

The Council held an exchange of views on a review of the Lamfalussy regulatory process for financial services carried out by the Commission and the financial services committee on the basis of a report from an inter-institutional monitoring group.

The Council FINDS that, overall, experience to date with the Lamfalussy process is positive. Nevertheless, the Council CONSIDERS that, without changing the inter-institutional balance between the European Parliament, the Council and the Commission, further improvements in these areas should be introduced at all Lamfalussy Levels.

The Council NOTES that the main responsibility for limiting the number of options and discretions in the EU Directives, and thus creating the necessary preconditions for further supervisory convergence, is with the legislator (the Council and the European Parliament) and UNDERTAKES to limit the use of national discretions and 'gold-plating' to the minimum extent necessary, and INVITES the institutions to introduce a “review clause” in future EU legislation on all options and discretions included in the respective acts.

The Council STRESSES the importance of Level 3 committees and their members having adequate means to fulfil their tasks in terms of EU supervisory convergence and cooperation.

The Council UNDERLINES the importance of considering including in the mandates of national supervisors a task to cooperate within the EU and to work towards European supervisory convergence and to take into account the financial stability concerns in all Member States;

The Council STRESSES the need for efficient and effective supervision of cross-border groups.

The Council CONSIDERS that the functioning of the colleges of supervisors could be enhanced by the introduction of a set of common operational guidelines for the operation of such colleges and the rights and responsibilities of the different members (home and host Member States' authorities and INVITES the level 3 Committees to study the possibilities for setting these guidelines to provide consistency in the working procedures of the different colleges and effectiveness of the decision making process and provide reassurance to supervisors involved in the college. In addition, the Level 3 Committees are INVITED to monitor the coherence of the practices of the different colleges of supervisors and to share best practices,

The Council INVITES the Commission, with the assistance of the Level 3 Committees, to review the financial services Directives,

The Council REQUESTS the Level 3 committees to enhance the efficiency and effectiveness of their decision-making procedures by introducing in their charters the possibility to apply qualified majority voting where necessary.

The Council therefore set out a roadmap on certain studies /actions to be undertaken by the different institutions.

Roadmap

By April 2008:

The Commission to clarify the role of the Level 3 committees and to consider all different options to strengthen the working of these committees

The FSC and EFC to examine the inclusion in the mandates of national supervisors of the objective of EU supervisory cooperation and convergence

Member States to adopt common formats to disclose national transposition and implementation of EU legislation

By Mid 2008

Level 3 committees

- to transmit draft work programmes and report annually on progress

- to explore the possibilities to strengthen the national application of guidelines

- to introduce qualified majority voting coupled with comply or explain procedure

- to study the possibilities for colleges of supervisors

- to suggest a timetable for the introduction of EU-wide reporting formats

By End 2008

The Commission

- to conduct a cross-sectoral stock taking exercise of the coherence, equivalence and actual use of sanctioning powers among Member States

- to consider financial support and to study the possibilities for EU funding under the EU-budget (for L3 Committees)

- to review financial services Directives to include provisions for voluntary delegation of supervisory competences

- to study the differences in supervisory powers and objectives between national supervisors and to define a coherent set of powers in the relevant financial services Directives by the end of 2009

By Mid 2009

The Commission

- to carry out cross sectoral consistency checks, where still necessary to foster coherence of terminology and effect across all EU financial services law.

Council Conclusions - REVIEW OF THE LAMFALUSSY PROCESS

The solvency of insurance companies (Solvency II)

The Council held a policy debate on a proposal for a directive setting new solvency rules for insurance and reinsurance companies ("Solvency II"), on the basis of a progress report from a Council working group.

The Council agreed on the need for further work on provisions dealing with group support, as regards:

- impact on the integration of the internal market and on competition at national level;

- impact on the protection of policyholders and beneficiaries in crisis situations;

- clarification of legal and practical aspects encompassing the certainty of the cross-border fund transfer between different entities within a group;

- clarification of the role of the "college of supervisors" and the insurance supervisors committee within the limits of the review of the Lamfalussy regulatory process.

Solvency II - progress report

Risk capital markets

The Council took note of a progress report from the financial services committee (FSC) on the identification of barriers to the further development of European risk capital markets.

It adopted the following conclusions (excerpt):

- WELCOMES the Commission’s intention to publish a Communication on removing obstacles to cross-border investments by venture capital funds, and LOOKS FORWARD to examining the Commission's proposals on the way forward;

– STRESSES the importance of removing, where appropriate by modernising EU legislation, relevant outstanding obstacles in Member States' legislations to investment in private equity/venture capital by institutional investors, and EMPHASISES accordingly the current negotiations on the Solvency II Directive with a view to swift adoption by the European Parliament and the Council, the related future Level 2 measures that will follow, and the clarification of relevant accounting rules; LOOKS FORWARD to the review of the Directive on Institutions for Occupational Retirement Provision, expected in 2008.

Council Conclusions - RISK CAPITAL MARKETS

LISBON STRATEGY

The Council adopted the following conclusions (excerpt).

Better Regulation and Competition

Good progress is being made in many Member States on better regulation, especially in measuring and reducing unnecessary administrative burdens. Countries that have not yet set a target in this area, are invited to do so. Concrete delivery and additional initiatives are now needed on impact assessments and simplification, also at the EU level. More should be done to strengthen the independence of regulators and national competition authorities.

Barriers to competition in the services sector remain a cause for concern, in particular in the areas of professional services and retail trade. Good progress has been made with regard to regulatory barriers to entrepreneurship, but further efforts are required to make it easier, quicker and less costly to set up a business and hire the first employee.

Council Conclusions - LISBON STRATEGY