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Europaudvalget 2007-08 (2. samling)
Det Europæiske Råd 13-14/3-08 Bilag 6
Offentligt

COUNCIL OF

THE EUROPEAN UNION

Brussels, 7 March 2008

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POLGEN 29

NOTE

from :

to :

Subject

Presidency

Council

European Council (13 and 14 March 2008)

– Draft conclusions

The Presidency hereby submits to Council draft conclusions to be agreed by the European Council

at its meeting on 13 and 14 March 2008.

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The meeting of the European Council was preceded by an exposé by the President of the European

Parliament, Mr Hans-Gert Pöttering, followed by an exchange of views.

The fundamentals of the European Union economy remain sound: public deficits have been

more than halved since 2005 and public debt has also declined to just under 60%. Economic

growth has reached 2,9% in 2007, but is likely to be lower this year. 6,5 million jobs were

created in the last two years. Although cyclical factors have played a role, these developments

have been aided by the structural reforms undertaken over the last years within the framework

of the Lisbon Strategy and the beneficial effects of the Euro and the single market.

However, the global economic outlook has deteriorated recently as a result of a slowdown of

economic activity in the United States, higher oil and commodity prices, and ongoing

turbulence on the financial markets. This is why it is all the more essential for the Union to

avoid complacency and sustain reform efforts through the full implementation of the National

Reform Programmes and the Integrated Guidelines for Growth and Jobs. Efforts to complete

and deepen the internal market must continue. Closely coordinated economic and financial

policies must be geared towards ensuring macro-economic stability, taking up the

opportunities of globalisation and addressing the challenges ahead including ageing

populations, climate change and energy. In order to ensure greater stability of financial

markets action is also required to strengthen their transparency and functioning and to further

improve the supervisory and regulatory environment at national, EU and global level.

The European Council notes that recent significant increases in food and energy prices have

contributed to inflationary pressures. In this regard, the European Council recalls the need to

avoid distortionary policies that prevent the necessary adjustments by economic agents. It

invites the Council to identify the driving forces behind developments of commodity and food

prices and pursue EU and national policies which remove possible supply limitations.

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LAUNCHING THE NEW CYCLE OF THE RENEWED LISBON STRATEGY FOR

GROWTH AND JOBS (2008-2010)

Further to the Commission's Strategic Report and in the light of work in the relevant Council

formations the European Council launches the second three-year cycle of the Strategy by



confirming that the current Integrated Guidelines (BEPGs and Employment Guidelines)

remain valid and should serve for the period 2008-2010. The Council (ECOFIN and

EPSCO) is invited to formally adopt the Integrated Guidelines in accordance with the

Treaty;



endorsing the country-specific recommendations for the economic and employment

policies of the Member States and the Euro area as drawn up by the Council on the basis

of the Commission's proposals. The Council is invited to formally adopt them. Member

States should set out detailed and concrete actions addressing their specific policy

response to the Integrated Guidelines, country-specific recommendations and "points to

watch" in their National Reform Programmes and the subsequent annual

implementation reports. The Commission is invited to continue working with Member

States to further develop a clear and transparent methodology for the monitoring and

evaluation of Lisbon reforms;



taking into account the priorities identified by the Council and the concrete actions set

out below, inviting the Commission, the European Parliament and the Council, within

their spheres of competence, to take forward work on the 10 objectives identified in the

Community Lisbon Programme, which provides a strategic reform agenda for the

Community part of the renewed Lisbon Strategy; progress should be assessed annually.

The focus of the new cycle will be on implementation. The European Council therefore:



reconfirms the four priority areas agreed at its Spring 2006 meeting as the cornerstones

of the renewed Lisbon Strategy and at the same time calls for synergies among them to

be exploited to a greater degree;

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

invites the Commission and Member States in the context of multilateral surveillance to

step up the exchange of best practices, in particular by making full use of existing

methods of open coordination, efficient coordination within the euro-area being of

particular importance;



invites the Commission and Member States to strengthen the involvement of relevant

stakeholders in the Lisbon process;



recognises the role of the local and regional level in delivering growth and jobs;

increased ownership of the growth and jobs agenda at all levels of government will lead

to more coherent and effective policymaking;



emphasises that economic, social and territorial cohesion also contribute to fulfilling the

objectives of the renewed Lisbon Strategy and welcomes the progress made in targeting

cohesion funds in support of national reform programmes and implementation of the

Integrated Guidelines. Now that the programming phase has been completed, the

European Council calls on Member States to ensure that expenditure reflects the

earmarking commitments made;



underlines the importance of macro-economic stability in addressing longer-term

challenges ahead. The EU budgetary framework, as defined by the revised Stability and

Growth Pact, provides the appropriate tools in this regard. The improvement in the

overall budgetary situation in the EU provides the necessary room for manoeuvre for

automatic stabilisers to play if downside risks were to materialise. Countries that have

reached their medium-term objective should maintain their structural position and all

countries not yet at their medium-term objectives should speed up the pace of deficit

and debt reduction, in line with the Council opinions on the Stability and Convergence

programmes, and allocate possible higher-than-expected revenues to this objective. The

quality of public finances needs to be improved by raising efficiency and effectiveness

of public expenditures and revenues, modernising public administration and favouring

measures in public budgets that promote productivity, employment and innovation;

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

reconfirms the importance of the social dimension of the EU as an integral part of the

Lisbon Strategy and in particular stresses the need to further integrate economic,

employment and social policies;



agrees the concrete actions set out below. In this connection, the European Council

endorses the key messages from the Council in its ECOFIN, Competitiveness,

Employment and Social Policy, Environment and Education and Youth formations, as

well as the Council conclusions on the Single Market Review.

The European Council furthermore stresses that a continued EU-level commitment to

structural reforms and sustainable development will be necessary after 2010 in order to lock

in the progress achieved by the renewed Lisbon Strategy for growth and jobs. The European

Council therefore invites the Commission, the Council and the National Lisbon coordinators

to start reflecting on the future of the Lisbon strategy in the post-2010 period.

Investing in knowledge and innovation

A key factor for future growth is the full development of the potential for innovation and

creativity of European citizens built on European culture and excellence in science. Since the

relaunch of the Lisbon Strategy in 2005, joint efforts have led to significant achievements in

the areas of research, knowledge and innovation. The implementation of the broad-based

innovation strategy is key to realising EU ambitions in the area. All the priorities of the

strategy need to be taken forward rapidly. At the same time further efforts must be made,

including in the private sector, with a view to investing more, and more effectively, in

research, creativity, innovation and higher education and achieving the 3% R&D investment

target. The European Council highlights the following actions on which the Member States

and the Community are urged to make swift progress:



Member States are invited to set out in their National Reform Programmes how

progress towards national R&D investment targets will be achieved and how their R&D

strategies will contribute to the realising and better governance of the European

Research Area;

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

key projects, such as GALILEO, EIT, the European Research Council, the Risk-Sharing

Finance Facility, the Joint Technology Initiatives must be swiftly implemented or

further promoted; decisions on Article 169 initiatives and additional research initiatives

should be taken as soon as possible;



scientific e-infrastructure and high-speed internet usage must be significantly increased.

Member States should aim to make high-speed internet available to all schools by 2010

and to set ambitious national targets for household access as part of their National

Reform Programmes;



an EU-wide market for venture capital for the most innovative companies must be

promoted; in that respect the European Investment Fund must play a key role in the

financing of innovative SMEs;



efforts towards improving the framework conditions for innovation should be better

coordinated, including through improved science-industry linkages and world-class

innovation clusters;



particular attention should be given to further initiatives for joint programming of

research, mutually complementary international S&T cooperation strategies and the

strengthening of research infrastructure of pan-European interest;



universities should be allowed to develop partnerships with the business community so

as to benefit from complementary private sector funding.

In order to become a truly modern and competitive economy, and building on the work

carried out on the future of science and technology and on the modernisation of universities,

Member States and the EU must remove barriers to the free movement of knowledge by

creating a

"fifth freedom"

based on:



enhancing the cross-border mobility of researchers, as well as students, scientists, and

university teaching staff,

making the labour market for European researchers more open and competitive,

providing better career structures, transparency and family-friendliness,

further implementing higher education reforms,

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

facilitating and promoting the optimal use of intellectual property created in public

research organisations so as to increase knowledge transfer to industry, in particular

through an "IP Charter" to be adopted before the end of the year,



encouraging open access to knowledge and open innovation,

fostering scientific excellence,

launching a new generation of world-class research facilities,

promoting the mutual recognition of qualifications.

Unlocking the business potential, especially of SMEs

Decisions taken since the renewal of the Lisbon Strategy have started to improve conditions

for market players. It has become easier to set up a business as all Member States have

established one-stop shops or similar arrangements to facilitate registration and reduce

paperwork. The European Council welcomes the progress made during 2007 on

better

regulation

and considers that further efforts are needed in order to deliver crucial

improvements to the competitiveness of EU business, in particular SMEs. Better regulation

should be considered a high priority by each Council formation in its regulatory work. To

ensure that the better regulation initiative delivers real and substantial economic benefits:



efforts on reducing administrative burdens arising from EU legislation by 25% by 2012

should be stepped up, in line with the European Council Conclusions of March 2007;

progress made will be evaluated at the 2009 Spring meeting on the basis of the

Commission's "Strategic Evaluation of Better Regulation";



pending "fast track" legislative proposals should be swiftly adopted and new ones

identified, and the Commission should also continue to bring forward administrative

burden reduction proposals on an ongoing basis; the simplification rolling programme

should continue to be implemented;



more should be done to develop the capacity of EU institutions on impact assessment, in

line with the relevant key message from the Council (Competitiveness).

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10.

The

Single Market

remains a crucial driver for enhancing living standards of European

citizens and Europe's competitiveness in the globalised economy. In order to further improve

the functioning of the Single Market so as to allow business, in particular SMEs, and

consumers to make full use of its potential the following measures and actions need to be

taken forward as immediate priorities:



ensure an effective follow-up to the Commission's Single Market Review on a yearly

basis with a focus on actions needed to boost growth and jobs by removing remaining

barriers to the four freedoms of the treaty, including, where appropriate, through

harmonisation as well as mutual recognition. In this context market developments

should be monitored in order to prioritise action in markets where there are genuine and

significant barriers to market functioning and competition. Due attention must also be

paid to the social dimension and services of general interest;



reinforce efforts to strengthen competition in network industries (energy, electronic

communications) and to adopt the adequate regulatory frameworks; in this context work

on interconnections must be pursued and accelerated;



ensure a complete, coherent, and timely transposition and implementation of the

Services Directive which is an important step towards the creation of a genuine single

market for services. In this context it is crucial to improve the functioning of "e-Single

Market" by putting in place cross-border interoperable solutions for electronic signature

and e-authentication.

11.

Small and medium sized enterprises

(SMEs) form the backbone of European economy and

have the potential to contribute significantly to creating more growth and jobs in the European

Union. In order to reinforce the Union's SMEs policy and to allow them to operate more

effectively in the Single Market, the following actions are of immediate importance:



swift examination by the Council of the upcoming Small Business Act initiative setting

out an integrated approach across the SMEs' life cycle in line with Better Regulation

and Think Small First principles and intended to further strengthen SMEs' growth and

competitiveness;



the introduction, where justified and following screening of the acquis communautaire,

of exemptions for SMEs from the administrative requirements of EU legislation;

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

strengthened support of research-performing and innovative SMEs with high growth

potential, for example through a new European private company statute;

further facilitation of access to finance, including through existing EU financial

instruments;

facilitation of increased participation of innovative SMEs in clusters and in public

procurement.

12.

Open markets and a sound international environment contribute to growth and jobs and

should lead to reciprocal benefits. The EU should therefore continue its endeavours to shape

globalisation by reinforcing the

external dimension of the renewed Lisbon strategy.

The

European Council welcomes the Commission's intention to report annually on market access,

identifying countries and sectors where significant barriers remain and believes that the EU

should continue its endeavours to:



promote free trade and openness as a means to foster growth, employment and

development for itself and its trading partners and continue to take the lead in this

domain;



improve the multilateral trading system, in particular by continuing to strive for an

ambitious, balanced and comprehensive agreement in the Doha Development Round;

conclude ambitious bilateral agreements with important trading partners and further step

up the efforts for integration with neighbouring countries and candidate countries

through developing a common economic space;



secure reliable access to energy and to strategic raw materials;

strengthen existing economic relations and develop mutually beneficial strategic

partnerships with emerging economic powers in a context of fair competition;

foster regulatory cooperation, convergence of standards and equivalence of rules in the

mutual interest of the EU and its partners, and improve the effectiveness of the

Intellectual Property Rights enforcement system against counterfeiting.

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Investing in people and modernising labour markets

13.

The education element of the knowledge triangle "research-innovation-education" should be

strengthened. Providing high-quality education and investing more and more effectively in

human capital and creativity throughout people's lives are crucial conditions for Europe's

success in a globalised world. This can bridge and facilitate the movement towards a

"knowledge-based economy", create more and better jobs and contribute to sound fiscal

positions. They are also effective ways of fighting inequality and poverty and can contribute

to reducing youth unemployment.

14.

The European Council looks forward to the Commission's proposal for a renewed Social

Agenda which should play a key role in strengthening the social dimension of the Lisbon

Strategy by taking account of Europe's new social and labour realities and also covering

issues such as youth, education, migration and demography as well as intercultural dialogue.

In this context combating poverty and social exclusion, promoting active inclusion and

increasing employment opportunities for those furthest from the labour market are all of

major importance. To this end all the appropriate instruments and tools available at

Community level should be used. In view of increasing skills shortages in a number of

sectors, it invites the Commission to present a comprehensive assessment of the future skills

requirements in Europe up to 2020, taking account of the impacts of technological change and

ageing populations and to propose steps to anticipate future needs. Economic migration can

play a role in meeting the needs of the labour market and can contribute to help reduce skills

shortages. The European Council therefore considers that the employment and social impact

of migration of third-country nationals needs to be addressed in the context of the

Commission proposals for a common policy on immigration.

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15.

The European Council urges Member States to take concrete action to:



substantially reduce the number of young people who cannot read properly and the

number of early school leavers, and improve the achievement levels of learners with a

migrant background or from disadvantaged groups;



attract more adults, particularly low-skilled and older workers into education and

training and to further facilitate geographic and occupational mobility;

promote higher overall labour force participation and tackle segmentation in order to

ensure active social inclusion;

improve policy consistency and coordination of economic, employment and social

policies in order to enhance social cohesion.

16.

Flexicurity strikes a balance between flexibility and security on the labour market and helps

both employees and employers to seize the opportunities globalisation offers. In line with the

recommendations of European social partners of October 2007 and recognizing that there is

no single flexicurity model, the European Council calls on the Member States to implement

the agreed common principles on flexicurity by outlining in their 2008 National Reform

Programmes the national arrangements giving effect to those principles. Flexibility and

security are mutually reinforcing throughout the life cycle. In this context, intergenerational

solidarity should be considered within all four components of flexicurity. Continued attention

needs to be given to youth employment, and in particular to the transition from education to

employment in the context of the implementation of the European Youth Pact. Attention

should also be given to the employment of disabled persons. The availability and affordability

of quality child care should be increased in line with national and Community targets. Efforts

should be pursued to reconcile work, private and family life for both women and men,

substantially reduce gender pay gaps and implement the European Pact for Gender Equality.

The European Alliance for Families can also contribute to achieving these aims.

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CLIMATE CHANGE AND ENERGY

17.

Last year the EU made firm and ambitious commitments on climate and energy policy; now,

in 2008, the challenge is to deliver. In December of last year the Bali Climate Conference

made an important breakthrough and launched an inclusive international negotiating process

set out in full in the Bali roadmap. The EU is committed to maintaining international

leadership on climate change and energy and to keeping up the momentum of negotiations on

the United Nations Framework Convention on Climate Change in particular at the next

Conference of parties in Poznań. The objective is to secure an ambitious, global and

comprehensive post-2012 agreement on climate change at Copenhagen in 2009 consistent

with the EU's 2°C objective. By delivering on its own targets, the EU will make a major

contribution to this objective. A key challenge will be to ensure that this transition to a low-

carbon economy is handled in a way that is consistent with EU sustainable development,

competitiveness, security of supply, sound and sustainable public finance. The EU proposes to

commence and actively contribute to high level discussions within the context of the United

Nations Framework Convention on Climate Change and the Bali Action Plan, on the

development of a coherent, effective and fair financial architecture for a post-2012 agreement.

Taking into account that energy and climate is an integral part of the Lisbon Strategy it will

also contribute positively to broader growth and jobs objectives.

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18.

The ambitious package of proposals proposed by the Commission to implement the

conclusions of the Spring European Council 2007 provides an excellent starting point and

basis for agreement. The European Council invites the Commission to continue to support

Member States' efforts to reduce their emissions of greenhouse gases through comprehensive

and ambitious Community policies and measures. Comprehensive deliberations by the

Council, working closely with the European Parliament, should result in an agreement on

these proposals as a coherent package before the end of 2008 and consequently allow for their

adoption within the current legislative term, at the latest early in 2009. In so doing, the

Council should bear in mind the importance of maintaining the overall balance across the

package as a whole and should base its work on the principles of transparency, economic

efficiency and cost-effectiveness, and fairness and solidarity in the distribution of effort

between Member States. It should also take into account Member States' different starting

points, circumstances and potentials as well as achievements accomplished, and respect the

need for sustainable economic growth across the Community with all sectors contributing. A

cost-effective and flexible way should be followed as well when developing market-based

instruments to reach energy and climate policy objectives. Stepping up to the more ambitious

30% reduction target as part of a global and comprehensive agreement needs to be built in

explicitly and in a balanced, transparent and equitable way, taking into account work under

the Kyoto Protocol first commitment period.

19.

The European Council recognizes that in a global context of competitive markets, the risk of

carbon leakage is a concern in certain sectors particularly exposed to international

competition that needs to be analysed and addressed urgently in order for appropriate

measures to be implemented in the event that other countries do not commit to taking

adequate measures to reduce greenhouse gas emissions in the context of an international

agreement.

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20.

The European Council underlines that the EU ETS forms an essential part of an integrated

climate and energy policy and recognizes the importance of a single EU-wide ETS cap and an

emissions reduction trajectory. The revised Directive should enhance the cost-effectiveness of

the necessary emission reductions and should enable the EU ETS to link to other mandatory

emissions trading systems capping absolute emissions. The European Council also underlines

the need for flexibility in achieving national non-ETS and renewable targets and in this light

stresses the importance of effective national support schemes for renewable energies and

stresses the need for Community and Member States' energy policy to increase energy

efficiency and security of supply as key elements for achieving the EU's integrated climate

and energy policy and sustainable economic development.

21.

The European Council recalls that the objective of proposing a regulatory framework on

carbon capture and geological storage (CCS) is to ensure that this novel technology is

deployed in an environmentally safe way, which will be demonstrated through projects, as

agreed in spring 2007.

22.

In meeting the ambitious target for the use of biofuels it is essential to develop and fulfil

effective sustainability criteria, which could in the future also be considered for the use of

other forms of biomass for energy.

23.

It is necessary to achieve greater synergies between climate change and biodiversity policies

as a way of securing co-benefits, in particular by strengthening mutually supportive activities

and measures with regard to climate-change mitigation and adaptation and to the production,

consumption of and trade in biofuels. The European Council encourages Member States and

the Commission to strengthen efforts aimed at halting biodiversity loss by 2010 and beyond.

The 9

Conference of the Parties to the CBD in May 2008 in Bonn and the full

implementation of the NATURA 2000 network are essential steps towards achieving this

objective.

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24.

An effective, fully-functioning and interconnected internal energy market is an essential

condition for secure, sustainable and competitive supply of energy in Europe. The European

Council therefore urges the Council to build on recent progress on the third internal market

package for gas and electricity in order to reach political agreement by June 2008, taking full

account of the Spring 2007 European Council conclusions.

25.

The European Council recalls the importance it attaches to enhancing the energy security of

the EU and its Member States. Whereas action on climate change and energy, the internal

energy market and new technologies all contribute to this objective, work must also be

vigorously pursued on further developing the external dimension of the 2007-2009 Energy

Policy for Europe. The European Council welcomes the progress achieved in this regard, as

set out in the state of play report submitted to the Council (doc. 6778/08) and will undertake a

more comprehensive assessment of progress on implementation and further actions needed in

the light of the next Strategic Energy Review to be presented in November 2008 and endorsed

by the Spring European Council 2009 and which will serve as the basis for the new Energy

Action Plan from 2010 onwards to be adopted by the Spring 2010 European Council. This

Strategic Energy Review will focus in particular on security of supply, including regarding

interconnectors, and external energy policy. The European Council attaches particular

importance to the EU and its Member States to speaking with common voice on energy issues

with third parties.

26.

The European Council welcomes the joint report from the High Representative and the

Commission on the impact of climate change on international security. It underlines the

importance of this issue, and invites the Council to examine the paper and to submit

recommendations on appropriate follow-up action on how to intensify cooperation with third

countries and regions regarding the impact of climate change on international security by

December 2008 at the latest.

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27.

The transition into a safe and sustainable low carbon economy will have an impact on

numerous policies and on the economic and daily life of the citizens. Coherent policies

exploiting the synergies relating to energy and climate change are also needed in the other

three priority areas of the Lisbon Strategy as well as in other EU policy areas, including:



developing coherent R&D and innovation policies at the European and national levels;

unlocking the business potential of eco-industries and developing a sustainable

industrial policy and sustainable and globally competitive lead markets, while taking

into account the impact of Energy and Climate Change measures on competitiveness;



promoting a sustainable transport system which allows Member States, in the

framework of EU policies, to take the necessary measures to combat climate change

effectively;



considering a review of the Energy Taxation Directive to bring it closer in line with the

EU's energy and climate change objectives;

improving energy and resource efficiency in all sectors;

informing the consumer about the efficient use of energy in order to tackle social

impacts and opportunities of Energy and Climate Change.

28.

The European Council emphasises the need for sustained investment in research and

development and an active take-up of new technologies in energy, as outlined recently in the

European Strategic Energy Technology Plan put forward by the Commission.

29.

The European Council recognises that addressing energy and climate change is also a matter

of shaping values and changing citizens' behaviour. It therefore urges national governments

and European institutions to set an example by making substantial progress towards reducing

energy use in their buildings and car fleets.

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THE STABILITY OF FINANCIAL MARKETS

30.

The European Council endorses the interim report by the Council (ECOFIN) on financial

market stability. While conditions in the international financial system remain fragile, some

adjustments in follow-up to the turmoil have already taken place in financial markets since

last autumn as the European Central Bank, national and EU authorities and financial

institutions have acted to stabilise the situation.

31.

Prompt and full disclosure of exposures to distressed assets and off-balance sheet vehicles

and/or of losses by banks and other financial institutions is essential. Improvements are

needed to the prudential framework, the risk management of individual institutions, in an

environment of constant financial innovation which has underscored new challenges for crisis

prevention and financial supervision at national, EU and global level.

32.

In responding to the turmoil, the European Council agrees that while primary responsibility is

with the private sector, authorities in the EU stand ready to take regulatory and supervisory

actions where necessary. Policy action should focus on four areas:



enhancing transparency for investors, markets and regulators, in particular on exposure

to structured products and off-balance sheet vehicles;

improving valuation standards, in particular for illiquid assets;

reinforcing the prudential framework and risk management in the financial sector,

through reviewing a number of areas of the Capital Requirements Directive (CRD), and

the enhancement of the management of liquidity risk. The Council encourages the

Commission to proceed with consultations and to put forward its proposal by September

2008 and underlines the importance to strive for an agreement between the Council,

European Parliament and Commission by April 2009 on the necessary regulatory

changes; and



improving market functioning and incentive structure, including the role of credit rating

agencies on which the EU stands ready to consider regulatory alternatives if market

participants do not rapidly address these issues.

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33.

The current turmoil has highlighted the need for further strengthening of the financial stability

framework, through enhanced prudential supervision and improved tools for financial crisis

management. The European Council invites the Council (ECOFIN) to swiftly and completely

implement the programme of work agreed in Autumn 2007; this encompasses further progress

in Spring 2008 on:



financial supervision, where main issues include improvements to and convergence of

key supervisory rules and standards, convergence of regulatory/financial reporting,

clarification of the relationship between home-host authorities, the role of colleges of

supervisors and improvement of the functioning of Supervisory Committees and

consideration of inclusion of an EU dimension in the mandates of national supervisors

to facilitate convergence and cooperation;



the management of cross-border financial crisis situations, tools and procedures should

be enhanced and, as a first step, a new Memorandum of Understanding on cross-border

cooperation between the relevant authorities is expected to be signed in Spring 2008. On

the basis of further work by mid-2008, the Council should also scrutinise the

functioning of deposit guarantee schemes.

34.

In addition, early warning systems at the EU and international level should be enhanced,

including by strengthening the role of the IMF in oversight of macro-financial stability. On

financial markets’ stability issues, the EU should work in close cooperation with its

international partners in the relevant fora.

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35.

The European Council invites the Council to continue to give high priority to these issues in

the coming months, with a major review of progress in April 2008, and to monitor closely the

situation so as to react swiftly to possible adverse developments. The European Council will

come back to these issues as appropriate and at the latest in Autumn 2008.

36.

The European Council welcomes the Commission Communication on Sovereign Wealth

Funds (SWFs). The European Union is committed to an open global investment environment

based on the free movement of capital and the effective functioning of global capital markets.

SWFs have so far played a very useful role as capital and liquidity providers with long-term

investment perspective. However, the emergence of new players with a limited transparency

regarding their investment strategy and objectives has raised some concerns related to

potential non-commercial practices. The demarcation between SWF and other state-owned

and private funds is not always clear cut. The European Council agrees on the need for a

common European approach taking into account national prerogatives, in line with the five

principles proposed by the Commission, namely: commitment to an open investment

environment; support to on-going work in the IMF and the OECD; use of national and EU

instruments if necessary; respect of EC Treaty obligations and international commitments;

proportionality and transparency. The European Council supports the objective to agree at the

international level on a voluntary Code of Conduct for SWFs and defining principles for

recipient countries at international level. The EU should aim at giving a co-ordinated input to

this ongoing debate, and invites the Commission and the Council to continue work along

these lines.

INTERNATIONAL RELATIONS

p.m.

7288/08

DQPG

LIMITE EN