EUROPEAN COMMISSION MEMO Brussels, 10 October 2014 Preparation of Economic and Finance Ministers Council, Brussels, 14 October The EU Council of Economic and Finance (ECOFIN) Ministers will take place in Luxembourg on Tuesday 14 October at 11.30. The European Commission will be represented by Jyrki Katainen, Vice President in charge of Economic and Monetary Affairs and the Euro, Michel Barnier, Vice President in charge of Internal Market and Services, Algirdas Šemeta Commissioner for Taxation, Customs, Audit, Anti-Fraud and Statistics and Jacek Dominik, Commissioner for Financial Planning and Budget. A press conference is expected to take place after the meeting. Taxation: mandatory automatic exchange of information (ET) Member States are expected to reach political agreement on the revision of the Administrative Cooperation Directive (see IP/13/530 and MEMO/13/533), which will ensure the widest scope of automatic exchange of information within the EU. This proposal is critical to the fight against tax evasion, and will ensure that the EU has a solid legislative base to apply the global standard of automatic exchange of financial account information. Member States have discussed the proposal at technical level and it is sufficiently advanced, including the incorporation of data protection safeguards, to seek political agreement and agree on an implementation date. Energy taxation (ET) Ministers will have an orientation debate to see if they can help move forward discussions at technical level on the revision of the Energy Taxation Directive. In 2011, the Commission presented a proposal to overhaul the rules on the taxation of energy products and electricity in the European Union (see IP/11/468). A key element of the proposal was that energy tax would reflect both CO2 emissions of the fuel and its energy content. The aim was also to restructure the way energy products and electricity are taxed, so as to ensure a level playing field for energy sources. During Council negotiations, many amendments to the proposal were tabled but none of the amended and watered-down versions of the proposal received the necessary unanimous support. Despite intense negotiations, there have been no signs of a political compromise which would even slightly modernise the existing rules and bring them more in line with EU energy and climate policy objectives. The Commission believes that the recent compromises produced by the Council are no longer in line with the original objectives of the Commission proposal and are disappointing compared to the original goals to reform energy taxation. MEMO/14/576 Measures in support of investment (SOC) Following discussion at the informal meeting of Finance Ministers in Milan, the Commission and the European Investment Bank (EIB) will report on the first meeting of the "Task Force to develop a Project Pipeline in the EU" which will meet the day before the Council. A special Task Force has been set up to address the infrastructure needs by strengthening project identification and development as a key measure to promote investment in Europe. The Task Force is co-chaired by the Commission and the EIB and it also consists of representatives of all the Member States. The Task Force seeks to create a productive forum enhancing experience and know-how sharing. It will cover key policy areas such as knowledge and the digital economy, transport, energy Union, social infrastructure and resources and the environment. The Task Force will provide an overview of the main investment trends and needs in these sectors; analyse the main barriers and bottlenecks to investment; compile strategic investments with EU added value that could be undertaken in the short run; and make recommendations for developing a credible and transparent pipeline for the medium to long term. The Task Force will produce a report for the December European Council. Commission Communication on research and innovation as sources of renewed growth (SOC) Ministers will exchange views on the Communication on research and innovation (R&I) as sources of renewed growth which the Commission published in June. The Commission highlighted the importance of R&I investments and reforms for economic recovery in the EU, and made proposals to help EU Member States maximise the impact of their budgets at a time when many countries still face spending constraints. Increasing R&I investment is a proven driver of growth, while improving the efficiency and quality of public R&I spending is also critical if Europe is to maintain or achieve a leading position in many fields of knowledge and key technologies. The Commission has pledged support to Member States in pursuing R&I reforms best suited to their needs, including by providing policy support, world-class data and examples of best practice. For more information: http://ec.europa.eu/research/innovation-union/pdf/state-of-the-union/2013/research- and-innovation-as-sources-of-renewed-growth-com-2014-339-final.pdf Follow-up to the G20 Finance Ministers and Governors' meeting on 9-10 October 2014 and Annual meetings of the IMF and World Bank Group on 10-12 October 2014 in Washington (SOC) The Presidency and the Commission will provide a debriefing from the G20 ministerial meeting and the annual IMF and World Bank meetings in Washington. Bank contributions under the Bank Recovery and Resolution Directive/Single Resolution Mechanism (SRM) Regulation – state of play (CH) The European Union has agreed new resolution rules for all EU banks (MEMO/14/294). It is now essential to make the national resolution funds established by the Bank Recovery and Resolution Directive (BRRD) (MEMO/14/297) and the Single Resolution Fund (SRF) established by the Single Resolution Mechanism Regulation (MEMO/14/295) a reality. 2 The European Commission is empowered to adopt a delegated act on banks’ contributions to the national resolution funds under BRRD and a proposal for a Council implementing act on banks’ contributions to the Single Resolution Fund under the Single Resolution Mechanism Regulation (SRM). Both acts will clarify how and how much individual banks will pay towards the Funds in order to meet the target levels set by the legislation. The Commission services are in the process of finalising the texts, elements of which have been discussed with the Experts of the European Parliament and the Member States in regular meetings. This work was complemented by a public consultation of all interested stakeholders (see IP/14/706). Vice-President Barnier will inform the Council of progress made with a view to conclude this important work as rapidly as possible. A swift finalisation would allow a timely application of the whole BRRD resolution framework by January 2015. More information: http://ec.europa.eu/internal_market/finances/banking-union/index_en.htm EU budget EU Budget Commissioner Jacek Dominik will emphasize the need to address EU budgetary aspects as a matter of urgency. As the budgetary authority has adopted annual budgets below the European Commission's estimates of what is actually needed in recent years, there are more and more bills that the EU budget cannot cover. It reached €26billion at the end of 2013 (out of a total budget of €136 billion). Jacek Dominik will urge Member States to honour their commitment to pay invoices for EU funded projects that they selected and managed themselves, and he will recall the spirit of the agreement for the 2014-2020 financial period, which foresees compensation for lower payment ceilings through full use of the available ceilings and of all flexibility instruments in the EU's annual budgets (see MEMO/14/550). 3.