Opening Statement by Mr Michael Noonan TD, Minister for Finance To

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Opening Statement by Mr Michael Noonan TD, Minister for Finance to

the Joint Committee on Finance, Public Expenditure and Reform

on the February 2015 ECOFIN Council Agenda

10 February 2015

I would like to thank the Chairman and Committee members for inviting me to speak to you in advance of the next Ecofin Council of Ministers meeting on Tuesday (17 February) in Brussels. Although we are a little under a week away from the meeting, and the final agenda may change, it is a useful opportunity to discuss the issues that are currently before Finance Ministers at the ECOFIN Council.

This is the second Ecofin Council under the Latvian Presidency, with Latvia taking over the Presidency for the first time from 1 January 2015.

I understand that the Latvian Ambassador to Ireland already briefed the Joint Committee on EU Affairs on 20 January on the Latvian Priorities for the Presidency term.

January Ecofin

In your invitation, you asked if I would also provide a brief overview of the proceedings of the January Council so I will address that item first. That meeting took place in Brussels on 27 January and I represented Ireland at the Council. The January Ecofin agenda was dominated by two main areas; Investment and Governance.

As part of the formal Agenda, a number of items were approved under the 'A' lists procedure (i.e. without debate) – including, the final compromise text of the Anti-Money Laundering Directive and the Regulation; on the taxation side, the anti-abuse clause to the Parent/Subsidiaries Directive was adopted; and a recommendation for a regulation amending Regulation (EC) No 2532/98, concerning the powers of the European Central Bank to impose sanctions, was adopted.

Ministers discussed the Commission proposal: Investment Plan for Europe: European Fund for Strategic Investments – Proposal for a Regulation of the European Parliament and of the Council on the European Fund for Strategic Investment and amending Regulations (EU) No 1291/2013 and (EU) 1316/2013. Following the Communication "An Investment Plan for Europe" published on 26 November 2014 – an initiative mobilising €315 billion of additional investment from public and private sources over the period 2015-2017 – the Presidency updated the Council on the establishment of the Ad-hoc working party on the regulation, which involves the establishment of a European Fund for strategic investments. Ministers had a preliminary exchange of views. This is a key priority for the Latvian Presidency, the European Commission and all Member States in trying to deliver jobs and growth for the peoples of Europe.

ECOFIN noted a Presidency report: Current legislative proposals - on the state of play in negotiations on current financial services legislative proposals. This is a standard item at each Council and keeps Ministers appraised of the latest position on the individual financial services dossiers.

Ministers were then given a Presentation of the Presidency Work Programme by the Latvian Presidency on its six-month work programme outlining priorities in the ECOFIN area.

The European Commission also made a presentation on the agenda item: Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Commission Work Programme 2015 - A new start.

Minsters then discussed two items under the heading of Economic Governance – Commission Communications. The first one related to Six Pack and Two Pack review - Communication from the Commission "Economic Governance Review" Report on the application of Regulations (EU) n° 1173/2011, 1174/2011, 1175/2011, 1176/2011, 1177/2011, 472/2013 and 473/2013. The Review found that, overall, the reformed governance framework introduced by this legislation proved effective although it acknowledged that the period of the review was limited.

The second clarified the Flexibility within the existing rules of the Stability and Growth Pact: Communication from the Commission to the European Parliament, the Council, the European Central Bank, the Economic and Social Committee, the Committee of the Regions and the European Investment Bank making the best use of the flexibility within the existing rules of the Stability and Growth Pact.

The Commission presented both communications together and there was a broad ranging discussion and all parties agreed that progress had been made in these issues. The Council will come back to these in due course as the Semester process unfolds.

Finally, Ministers adopted the Terms of Reference under the agenda item: Preparation of G20 Meeting of Finance Ministers and Central Bank Governors on 9-10 February 2015 in Istanbul

That was a brief overview of last month's Ecofin meeting.

February Ecofin

Now I will turn to the draft Agenda for next week's Ecofin and provide an outline of the key issues that are likely to arise. Work is continuing at the level of officials so there may still be changes between now and the meeting, in terms of content and the order of the discussion.

The draft Agenda is divided into two parts. The first part of the Agenda relates to Legislative deliberations – items which are held in public.The first item here is the 'A' lists item - matters agreed without debate. At present there are no items under this heading. These will only become clear as the agenda is finalised.

The next item is the Investment Plan for Europe: European Fund for Strategic Investments (First Reading). Ministers are scheduled to have a State of Play discussion on this issue as a follow-up to that at the January Ecofin. The Presidency will update the Council on progress of the Ad-hoc working party on the regulation. Discussions are ongoing. The Presidency are aiming to have an agreed Council position on the regulation to establish the fund by the March Ecofin in order to meet the deadline of agreement on the issue with the European Parliament by end June.

The final item under thisportion of the Agenda is the item on Current legislative proposals. This is the regular update from the Presidency on Financial Services Files.

The second part of the Agenda relates to the Non-legislative activities. The first matter listed is the Approval of the list of "A" items (i.e. without debate).We are not aware of any items under this heading at the moment.

The next item listed is the Annual Growth Survey 2015 and Alert Mechanism Report 2015. Ministers will have an exchange of views and adopt the draft Council Conclusions on the 2015 Annual Growth Survey (AGS), and Alert Mechanism Report (AMR).

I understand that the Chief Economist of the Department briefed the Committee on 21 January last on this matter.The publication of the Annual Growth Surveykick-starts the annual cycle of the European Semester. The Annual Growth Survey identifies broad reform priorities for Member States to act as a foundation for the creation of growth and jobs. The 2015 Survey has three pillars: a coordinated boost to investment, a renewed commitment to structural reforms and fiscal responsibility. The reform priorities set out in the draft Council Conclusions, once considered and agreed by Ecofin, are expected to be endorsed by Heads of State or Government at theEuropean Council in March.

The Alert Mechanism Report (AMR) identifies the Member States for which further analysis in the form of an in-depth review is necessary in order to decide whether an imbalance in need of policy action exists. The draft Conclusions note the Commission's intention to publish analytical work for the 16 Member States whose readings suggest they are in need of further analysis. These are expected tobe published later this month.

The next agenda item is Follow-up to the G20 Meeting of Finance Ministers and Central Bank Governors on 9-10 February 2015 in Istanbul.This is an information point. The G20 meeting of Finance Ministers and Governorstook place in Istanbul on 9-10 February 2015. Terms of reference were adopted by the Council at the January Ecofin and this item will provide an update on the discussion and outcome of the meeting.

Next on the agenda is the item on Council recommendation on the Discharge procedure in respect of the implementation of the budget for 2013.The Discharge procedure is the annual process whereby the Council makes a recommendation to the European Parliament on whether to grant Discharge to the European Commission for the manner in which the annual budget has been spent. At Ecofin, the Council will be asked to consider and endorse the outcome of Council Working Group and Coreper deliberations on Council's Discharge recommendation to the European Parliament on Budget 2013. This is an annual item and requires a Qualified Majority vote.

Next up is the draft Council conclusionson the EuropeanBudget Guidelines for 2016. The Budget Guidelines are the Council's input to the Commission preparations for the 2016 Budget proposal, reflecting the Council's priorities for the following year's budget. At Ecofin, the Council isexpected to endorse the draft guidelines.

Turning to the next item First assessment report of theHigh Level Group on Own resources,there will be a presentation by Mr Mario Monti, the Chair of the High Level Group on Own Resources (HLGOR), which was established, with the aim of undertaking a general review of the EU Own Resources system i.e. the system by which the EU Budget is financed. At Ecofin, the Group's chair will present the first assessment report which was published last December. This initial assessment is a scene-setting document which among other things provides a background analysis of the current Own Resources system, outlines the position of the various stakeholder institutions and highlights the issues to be considered in achieving reform in this area. It does not raise any issues of concern for Ireland.

The final item on the agenda is under the heading of Any other business.
No items are listed on the agenda under this heading at the moment.

Conclusion

Chairman, I trust you found the summary of last month's Ecofin meeting and the outline of this month's Ecofin agenda informative. I believe they give a good insight into the current issues before the Council.

I would like to thank you for your attention and, at this point, I will be happy to respond to any questions or observations that Members may have.

Ends

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