Rådsmøde 3387 (økonomi- og finansministre) den 12. maj 2015

Europaudvalget 2015-16
Rådsmøde 3387 - økofin
Offentligt

Council of the

European Union

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(OR. en)

PRESSE 32

PR CO 24

OUTCOME OF THE COUNCIL MEETING

3387th Council meeting

Economic and Financial Affairs

Brussels, 12 May 2015

President

Jānis Reirs

Minister for Finance of Latvia

PRESS

Rue de la Loi 175 B – 1048 BRUSSELS Tel.: +32 (0)2 281 6319 Fax: +32 (0)2 281 8026

[email protected] http://www.consilium.europa.eu/press

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Rådsmøde 3387 (økonomi- og finansministre) den 12. maj 2015 - Bilag 1335940:

12 May 2015

CONTENTS

ITEMS DEBATED

EUROPEAN FUND FOR STRATEGIC INVESTMENTS ................................................................ 3

FOLLOW-UP TO MEETING IN RIGA ............................................................................................. 4

ECONOMIC GOVERNANCE ............................................................................................................ 5

–

Macroeconomic imbalances: in-depth reviews........................................................................................................ 5

Implementation of structural reforms ...................................................................................................................... 5

SUSTAINABILITY OF PUBLIC FINANCES – 2015 AGEING REPORT ...................................... 8

FOLLOW-UP TO G20 FINANCE MEETING ................................................................................. 11

OTHER BUSINESS .......................................................................................................................... 12

MEETINGS IN THE MARGINS OF THE COUNCIL .................................................................... 13

–

Eurogroup .............................................................................................................................................................. 13

Ministerial breakfast meeting ................................................................................................................................ 13

Economic and financial dialogue with the Western Balkans and Turkey ............................................................. 13

OTHER ITEMS APPROVED

Foreign Affairs

–

Albania .................................................................................................................................................................. 14

Turkey ................................................................................................................................................................... 14

European Economic Area

–

EEA Council meeting ............................................................................................................................................ 14



Where declarations, conclusions or resolutions have been formally adopted by the Council, this is indicated

in the heading for the item concerned and the text is placed between quotation marks.

 

Documents for which references are given in the text are available on the Council's Internet site

(http://www.consilium.europa.eu).

 

Acts adopted with statements for the Council minutes which may be released to the public are indicated by

an asterisk; these statements are available on the Council's Internet site or may be obtained from the Press

Office.

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ITEMS DEBATED

EUROPEAN FUND FOR STRATEGIC INVESTMENTS

The Council discussed progress in negotiations with the European Parliament on a proposal for a

regulation establishing a European fund for strategic investments (EFSI).

The presidency will continue negotiating on behalf of the Council, taking account of comments

made.

The Council agreed its negotiating stance on 10 March 2015. Negotiations started on 23 April, after

the Parliament had defined its position. A third trilogue meeting was held on 7 May and a fourth is

scheduled for 13 May. The aim is to finalise negotiations by the end of May, so as to adopt the

regulation before the summer recess. This would enable new investments to begin as early as mid-

2015, as planned.

The EFSI will be established within the European Investment Bank by an agreement between the

Commission and the EIB. It will support projects in a broad range of areas, including transport,

energy and broadband infrastructure, education, health, research and risk finance for SMEs.

The fund will enhance risk-bearing capacity. By taking on part of the risk of new projects through a

first-loss liability, it will enable private investors to join under more favourable conditions.

The fund will be built on €16 billion in guarantees from the EU budget and €5 billion from the EIB.

Under the approach agreed by the Council, as proposed by the Commission, EU funding would

mostly come from redeploying grants from the Horizon 2020 programme (research and innovation)

and the Connecting Europe facility (transport, energy and digital networks), as well as unused

margins in the budget.

The regulation requires a qualified majority for adoption by the Council, in agreement with the

European Parliament. (Legal basis: articles 172, 173, 175(3) and 182(1) of the Treaty on the

Functioning of the EU.)

The EFSI is one of the core elements of the Commission’s €315 billion 'investment plan for

Europe', published in November 2014.

Press release on the Council’s negotiating stance on the EFSI regulation

Communication from the Commission on the investment plan

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FOLLOW-UP TO MEETING IN RIGA

The presidency informed the Council of the follow-up to be given to an informal meeting of finance

ministers and central bank governors held in Riga on 24 and 25 April 2015.

It emphasised the following two issues:

–

growth potential of the EU: structural reforms

capital markets union

The presidency plans further discussion on a capital markets union at the Council's meeting on

19 June 2015.

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ECONOMIC GOVERNANCE

–

Macroeconomic imbalances: in-depth reviews

Implementation of structural reforms

The Council discussed:

–

in-depth reviews published by the Commission of macroeconomic imbalances in

16 member states

implementation of its 2014 country-specific recommendations on economic, employment

and fiscal policies under the European Semester, the EU’s annual policy monitoring

process

–

It adopted the following conclusions:

"The Council:

1. WELCOMES the publication of the Commission's single integrated country reports analysing

the economic policies for each of the Member States and the euro area, including the in-depth

reviews (IDRs) in the context of the Macroeconomic Imbalances Procedure (MIP), as well as

the accompanying Communication summarising the main results of the IDRs.

2. CONSIDERS that this way of streamlining of the European Semester has proven to be a useful

first step to better examine and discuss the economic policies of Member States, thus allowing

for improved transparency and feedback on the Commission's analysis. For the future, further

enhancing ownership, as well as multilateral surveillance, aimed at strengthening the process

will be needed.

I - IN-DEPTH REVIEWS

3. CONSIDERS that the IDRs are structured in an appropriate way and present a thorough analysis

of the imbalances in each of the Member States under review, taking country-specific

circumstances and qualitative information into account. Relevant analytical tools are also

applied in view of the specific challenges of each economy.

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4. AGREES that 16 of the examined Member States which are identified in Alert Mechanism

Report 2015 (Belgium, Bulgaria, Germany, Ireland, Spain, France, Croatia, Italy, Hungary, the

Netherlands, Portugal, Romania, Slovenia, Finland, Sweden and the UK) are experiencing

macroeconomic imbalances of various natures and magnitudes. CONSIDERS that enhanced

transparency on the criteria for the categorisation of macroeconomic imbalances as well as

greater stability and predictability of the procedure itself would be welcome. AGREES that,

since last year, the imbalances in Slovenia should no longer be considered as excessive,

although high corporate leverage and persistent financial sector fragilities continue to warrant

specific monitoring. This is based on the fact that decisive policy actions have been taken on the

restructuring of the banking system. Furthermore, improved export performance and growth

conditions have reduced risks compared to last year, in particular those linked to the external

sustainability.

5. AGREES with the view of the Commission that excessive imbalances exist in 5 Member States

(Bulgaria, France, Croatia, Italy, and Portugal), and the Commission's intention to consider in

May the policy measures of France and Croatia, taking into account the level of ambition of the

National Reform Programme and other commitments presented by that date, and to decide

whether further steps are needed under the corrective arm of the MIP.

6. UNDERLINES the need for policy action and strong commitment to structural reforms in all

Member States, in particular when they face macroeconomic imbalances, especially if affecting

the smooth functioning of EMU. Imbalances should be addressed in a durable manner, reducing

risks, facilitating the rebalancing of the EU economies and creating conditions for sustainable

growth and jobs; and INVITES the Commission to come forward with well-focused and

consistent recommendations to the Member States addressing macroeconomic imbalances in the

context of the European Semester.

7. WELCOMES the Commission's plans with regard to specific monitoring of the

recommendations by the Council to the Member States with excessive imbalances (Bulgaria

France, Croatia, Italy and Portugal). Specific monitoring will also apply to a number of euro

area Member States with imbalances requiring decisive policy action (Ireland, Spain and

Slovenia), and INVITES the Commission to outline the concrete timing and content of such

monitoring. In line with established practice, the monitoring for Ireland, Spain and Portugal will

rely on post programme surveillance to avoid duplication.

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8. RECOGNISES that a number of macro-economic imbalances are being corrected, but

UNDERLINES that there are still sizeable risks in certain Member States. In particular, large

external liabilities make debtor countries vulnerable, and improvements in current account are

not always sufficient to diminish the stock of external debt. Although losses in price

competitiveness compared to pre-crisis levels have been partly corrected in a number of debtor

countries, strengthening export growth through further structural efforts remains a priority in

order to achieve a sustainable and growth-friendly rebalancing. At the same time, current

account surpluses remain high in some Member States: these reflect to some extent weak

domestic demand, which can be partially linked to low levels of private and public sector

investment. In addition, UNDERLINES that high levels of private and government debt remain

an important challenge in some countries, also in the context of low inflation and moderate

growth rates. Structural reforms are needed to enhance the growth potential and to tackle high

unenemployment, in particular among the youth and long-term unemployed.

II – IMPLEMENTATION OF COUNTRY SPECIFIC RECOMMENDATIONS

9. WELCOMES the overall progress made in addressing the 2014-15 Country Specific and the

euro area Recommendations. TAKES note that reform implementation has been uneven over

policy areas and across countries and AGREES that reform implementation needs to be stepped

up to address the individual policy challenges confronting each Member States and to ensure

swift and sustainable economic recovery.

10. RECOGNISES that further structural reforms in the services, product and labour markets and

responsible fiscal policies are needed in all Member States to strengthen and sustain the

economic recovery, correct harmful imbalances, achieve fiscal sustainability, improve the

conditions for investment and reinforce the single market, unleashing the growth potential of

Member States' economies.

11. LOOKS FORWARD to the Commission's publication of the 2015-16 Country Specific

Recommendations in mid-May to ensure the necessary in-depth multilateral discussions before

their adoption by the Ecofin council. INVITES the Commission to take into account the

discussion on Country Reports as well as the National Reform Programmes when drafting the

country-specific recommendations 2015.

12. STRESSES that country-specific recommendations should focus on areas of macroeconomic

significance where there is an urgent need for action, in order to give these issues more visibility

in the Member State’s national political debate. At the same time, common challenges for the

euro area and the EU as a whole will continue to be identified and monitored. CONSIDERS it

important to continue to ensure a sound and transparent analytical basis for the CSRs,

safeguarding equal treatment through consistency over time and across countries."

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SUSTAINABILITY OF PUBLIC FINANCES – 2015 AGEING REPORT

The Council discussed age-related expenditure projections for the member states over the 2013-60

period, on the basis of a joint report from the Economic Policy Committee and the Commission.

It endorsed the report and adopted the following conclusions:

"The economic and financial crisis has put a significant burden on public finances and has led

to rising deficits and debt levels. Ensuring the long-term sustainability of public finances is

therefore particularly important at the current juncture. The Council STRESSES the need for

appropriate growth friendly fiscal consolidation and for further implementation of structural

reforms in order to enhance the sustainability of public finances.

Against this background, the Council ENDORSES the 2015 Ageing Report: economic and

budgetary projections for the 28 EU Member States and Norway (2013-2060) prepared by the

Economic Policy Committee (Ageing Working Group) and the Commission (DG ECFIN) on

the basis of commonly agreed methodologies and assumptions. In line with previous editions,

the projections in the 2015 Ageing Report cover public expenditures on pensions, health care,

long-term care, education and unemployment benefits.

The Council HIGHLIGHTS the main findings of the 2015 Ageing Report:



Over the whole period 2013-2060, average annual GDP growth in the EU is projected to

be 1.4%, unchanged compared to the 2012 Ageing Report. However, there are

significant differences in the growth potential across Member States.

Total age-related public expenditures are projected to increase by 1.4 p.p. of GDP

between 2013 and 2060 in the EU, to reach 27% in 2060, with large differences across

countries. Excluding unemployment benefits (strictly-age-related expenditure), an

increase of 1.8 p.p. of GDP between 2013 and 2060 is projected in the EU, to reach

26.3% in 2060.

Taking into account possible more adverse macroeconomic assumptions, such as the

TFP risk scenario, strictly ageing-related public expenditures could increase by 2.1 p.p.

of GDP between 2013 and 2060. As a result of recent reforms and more benign

demographic developments projected for the EU as a whole in EUROPOP2013, the

projected increase in the total age-related expenditure over 2013-60 is now significantly

lower than projected in 2012 (3.3 pp. of GDP).



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

After a projected increase up to 2040, also related to the baby boom generation reaching

the retirement age, public pension expenditure is projected to return close to its 2013

level by 2060 (11.3 % of GDP for the EU). The diversity across Member States is very

large, depending on the degree and timing of population ageing, the specific features of

national pension systems and, notably, countries’ progress with structural reforms. In

most countries, recent pension reforms have had a visible positive impact by containing

public expenditure dynamics. Pension reforms have also contributed to an increase in

the effective retirement age and thus labour input. The scale of reforms in some

Member States is however still insufficient to curb the increase in public pension

expenditure.

Public expenditure on health care and long-term care is projected to increase by 2 p.p.

of GDP between 2013 and 2060 in the EU in the AWG reference scenario with

considerable differences across countries, reaching 10.6 % of GDP in 2060, which is

mainly due to demographic developments. Taking into account possible future

developments in non-demographic cost drivers in health care and long-term care

spending, as foreseen in the AWG risk scenario, the projected increase in care-related

spending could even reach 4 p.p. of GDP between 2013 and 2060.



In light of the updated age-related expenditure projections and the current economic situation,

the Council, while welcoming recent reforms in many Member States, REAFFIRMS that

there is a need to continue appropriate policy action in the EU in all age-related areas, notably

pension, health and long-term care reforms while taking into account country specificities,

and to avoid measures resulting in the reversal of sustainability enhancing reforms already

undertaken. This entails a prompt implementation of the Country Specific Recommendations

issued under the European Semester and of the three-pronged strategy for addressing the

economic and budgetary consequences of ageing, i.e. by reducing government debt, raising

employment rates and productivity, and reforming pension, health care and long-term care

systems.

The Council HIGHLIGHTS specifically that further steps still need to be taken by Member

States, though to varying degrees, to raise the effective retirement age, including by avoiding

early exit from the labour market and by linking the retirement age or pension benefits to life

expectancy. Moreover, the Council, recalling its Conclusions of 7 December 2010, INVITES

Member States to balance the need to provide universal health care and long-term care, meet

an increasing demand related to an ageing population, as well as growing patient expectations

due to technological development in the coming decades with the need to reduce high public

debt levels. This highlights the need to assess the performance of health and long term care

systems and implement sound and necessary reforms in order to achieve a more efficient use

of public resources as well as the provision of high quality health and long term care.

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The Council INVITES the Commission to factor these findings related to ageing challenges

and other relevant information including updated estimates of nearer-term potential GDP

growth

into its analysis and surveillance under the European Semester, and to take account of

its implications in all relevant fields of economic policy coordination in the EU.

The Council INVITES the Commission to undertake its regular in-depth overall assessment of

the sustainability of public finances by the end of 2015 using this set of comprehensive and

comparable updated projections. The Economic Policy Committee should on the basis of the

assessment report back to the Council.

The Council INVITES the Economic Policy Committee to update, on the basis of new

population projections to be provided by Eurostat, in close cooperation with the National

Statistical Institutes (NSIs), its analysis of the economic and budgetary implications of

population ageing by the autumn of 2018. Moreover, the Council INVITES Eurostat to

systematically provide annual updates of their population projections, in particular as regards

migration flows, to be used over the short to medium term forecast horizon."

On 1 April 2015 the EPC endorsed a revised approach to projecting population growth for

the purposes of potential GDP estimation for Ireland, Latvia and Lithuania.

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FOLLOW-UP TO G20 FINANCE MEETING

The Council took note of the outcome of the G20 meeting of finance ministers and central bank

governors held in Washington D.C. on 16 and 17 April 2015.

It asked the Economic and Financial Committee to prepare the next meeting of G20 finance

ministers and central bank governors, to be held in Ankara, Turkey, on 4-5 September 2015.

The second G20 finance ministerial meeting under the Turkish presidency focused on global

economic developments, G20 growth strategies, investment, IMF reform, financial sector reforms

and international tax issues.

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OTHER BUSINESS

The Council took stock of ongoing work on financial services dossiers.

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MEETINGS IN THE MARGINS OF THE COUNCIL

–

Eurogroup

Ministers of the euro area member states attended a meeting of the Eurogroup on 11 May 2015.

They were briefed on discussions on a comprehensive list of reforms in Greece, and discussed the

economic situation in the light of the Commission's spring economic forecast. They also looked into

inflation and exchange rate developments. Ministers shared their experiences in strengthening fiscal

frameworks, and discussed how to improve economic governance in the euro area. The Eurogroup

also welcomed progress made by Ireland on fiscal, financial and structural issues, reported in the

third post-programme surveillance report (following exit from its macroeconomic adjustment

programme).

Main results of the Eurogroup meeting

–

Ministerial breakfast meeting

Ministers held a breakfast meeting to discuss the economic situation. They also took stock of work

on flexibility under the EU's Stability and Growth Pact and on financial assistance for Romania.

–

Economic and financial dialogue with the Western Balkans and Turkey

Ministers met their counterparts from the Western Balkans and Turkey for a working lunch. They

issued joint conclusions.

Joint conclusions

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OTHER ITEMS APPROVED

Foreign Affairs

Albania

The Council approved the EU's common position ahead of the 7th meeting of the EU-Albania

Stabilisation and Association Council, to be held in Brussels on 18 May 2015.

Turkey

The Council established the EU's position for the 53rd meeting of the EU-Turkey Association

Council, to be held in Brussels on 18 May 2015.

European Economic Area

EEA Council meeting

The Council took note of preparations for a meeting of the

EEA Council

to take place in Brussels

on 18 May 2015.

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