Economic and Financial Affairs Council, 04/12/2018
Main results
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”.
Today we have taken a very important step towards completing the Banking Union. We are delivering measures to make European banks stronger, more stable and more resilient. The measures will create the conditions for ambitious decisions on reforming the euro-area.
Hartwig Löger, minister for finance of Austria, which currently holds the Council presidency
The measures deliver on three key objectives set out by the Council roadmap on completing the banking union agreed in June 2016:
- setting out an enhanced framework for bank resolution
- introducing the possibility for resolution authorities to suspend banks’ payments when it is under resolution
- 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 (press release, 04/12/2018)
- Banking union- risk reduction (background information)
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.
- Fight against money laundering (background information)
- Money laundering: Council adopts conclusions on an action plan for enhanced monitoring (press release, 04/12/2018)
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.
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.
- November 2018 report to the European Council on tax issues
- November 2018 report of the code of conduct group on business taxation
- November 2018 draft conclusions on the code of conduct on business taxation
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.
