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Europaudvalget 2009-10, Det Udenrigspolitiske Nævn 2009-10
Det Europæiske Råd 10-11/12-09 Bilag 3, UPN Alm.del Bilag 21
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COUNCIL OF

THE EUROPEAN UNION

Brussels, 3 December 2009

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POLGEN 228

ADDENDUM TO NOTE

from:

General Secretariat of the Council

to:

COREPER/Council

Subject:

European Council (10 and 11 December 2009)

– Draft conclusions

Delegations will find attached an addendum to the draft conclusions of the European Council.

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II.

The economic, financial and employment situation

The economic and financial crisis posed severe challenges to the world economy and resulted

in the most difficult economic downturn since the 1930s. To tackle the crisis, the EU and its

Member States implemented a wide range of extraordinary measures including the European

Economic Recovery Plan from December 2008. The support measures have been crucial in

order to restore confidence in financial markets and assure their proper functioning as well as

to dampen the impact of the crisis on growth and employment.

The economic situation has stabilised and confidence is increasing. Forecasts suggest a weak

recovery in 2010, followed by a return to stronger growth in 2011. But uncertainties and

fragilities remain. Policies in support of the economy should therefore remain in place and

only be withdrawn when recovery is fully secured. In order to anchor expectations and

reinforce confidence, the European Council reconfirms the importance of developing and

communicating credible and coordinated strategies for exiting from the broad-based stimulus

policies.

Exit strategies

The European Council emphasises that the fiscal exit strategy will be implemented within the

framework of the Stability and Growth Pact, which remains the cornerstone of the EU’s

budgetary framework. The recommendations to the countries in Excessive Deficit Procedure,

adopted by the Council on 2 December, are an important tool for restoring sound public

finances. In this context, the European Council reiterates its conclusions from 30 October on

fiscal exit strategy and recalls that the strategy will include a consolidation of well beyond the

benchmark of 0.5% of GDP per year combined with structural reforms underpinning long-

term fiscal sustainability. Fiscal consolidation should start in 2011 at the latest, earlier in

some Member States where economic circumstances make this appropriate, provided that the

Commission forecasts continue to indicate that the recovery is strengthening and becoming

self-sustaining.

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There is a need for more broad-based exit strategies, also taking into account the need to wind

down financial support schemes. The principles for withdrawal of support to the financial

sector, as set out by the Council on 2 December 2009, must guide further work. It is crucial to

develop a coordinated approach, taking account of financial stability, that introduces

progressive incentives for financial institutions to cease to depend on public financial support.

The European Council underlined that the phasing out of public support measures should be

duly coordinated among Member States to avoid negative spill-over effects, the timing of exit

should take into account a broad range of elements and that phasing out of support should

start with government guarantees.

The European Council encourages the Council to continue their work on exit strategies and to

report back by June 2010, both in the fiscal area and in the financial sector.

Financial supervision

The financial crisis has clearly demonstrated the weaknesses of the current regulatory

framework and supervisory arrangements for financial institutions. The European Council

welcomes the rapid and determined action taken by the Council who has agreed a

fundamentally new structure for financial supervision in Europe. This new structure is set up

to prevent future bubbles and crises in the economy and re-establish confidence of consumers

and investors in the markets.

The European Council welcomes the agreement on a complete package for a new supervisory

framework in the European Union. A new European Systemic Risk Board will provide the

European Union with a system for monitoring macro-economic risks and issue risk warnings

and recommendations. The three new supervisory authorities for banks, insurance and

securities markets will develop common technical standards have a strong co-ordinating role

in supervisory colleges and will ensure the consistent application of Community law. The

European Council looks forward to a swift adoption by the European Parliament so that the

new system can be up and running during the course of 2010.

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Capital requirements and remuneration policies

The adoption by the Council of a general approach regarding amendments to the Capital

Requirements Directive is a further step to strengthen the financial regulation in light of the

financial crisis. It enhances the capital requirements for certain banking activities and

introduces clear and binding rules on remuneration consistent with those endorsed by G 20

leaders. Remuneration policies within the financial sector must promote sound and effective

risk management and should contribute to preventing future crises in the economy. The

European Council is now looking to the European Parliament for a rapid final adoption of the

amendments. The European Council invites the financial sector to immediately implement

sound compensation practices and welcomes the Commission’s intention to closely monitor

the implementation of sound remuneration principles.

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