Tue. Dec 6th, 2022

Ministers discuss financial assistance for Ukraine and strengthening the resilience of the banking sector

Today, at a meeting of the ECOFIN Council in Brussels chaired by Zbyněk Stanjura, the finance ministers agreed on the need for a rapid continuation of macro-financial assistance to Ukraine in the amount of EUR 18 billion for 2023. The ministers also agreed on a compromise proposal implementing the Basel III international banking standards to increase the resilience of the EU banking sector. They also discussed the abolition of mandatory minimum road tax rates and the impact of the US Inflation Reduction Act legislation on European companies.

The finance ministers discussed the economic and financial aspects of the Russian aggression against Ukraine and the need to ensure the continuation of macro-financial assistance to Ukraine. “My personal visit to Kiev last week was a really powerful experience for me. You arrive in a warring country and you receive a message warning of the risk of bombing in the area you are in. I saw for myself the difference between judging the state of a warring country from the outside and direct personal experience,” said Finance Minister Zbyněk Stanjura.

In the spring, EU leaders decided to provide Ukraine with €9 billion in 2022 to run the state and ensure the functioning of critical infrastructure through macro-financial assistance. A total of €6 billion of this package has so far been disbursed to Ukraine, while the remaining €3 billion will be part of a new €18 billion package for 2023, which the Commission is expected to publish on 9 November.

“Today I have urged my colleagues in the Commission to speed up the preparation of the necessary legislation so that the new aid package can be approved at the December Ecofin under the Czech Presidency. The first € 3 billion to provide basic public services could reach Ukraine in early January,” minister Stanjura added.

The ministers also discussed the implementation of the Basel III standard, the international rules approved by the Basel Committee on Banking Supervision, into European legislation. The Commission’s so-called 2021 banking package aims, in particular, to revise existing capital requirements and thus make banks more resilient in the event of future economic shocks.

“We are confident that we have found a good compromise proposal that implements international standards while reflecting the specificities of the EU banking sectors. The key for us was to support the preparedness of European banks for possible future crises by increasing their capital requirements while avoiding disproportionate impacts on the EU banking sector,” said minister Stanjura.

Also on the agenda was a debate on the revision of the directive on the charging of heavy goods vehicles for the use of certain roads (Eurovignette). The amendment to the directive would abolish the obligation to apply the European minimum road tax rate to trucks over 12 tonnes. “I see the modification of the Directive as another step towards greater tax liberalisation. It will allow EU countries to set a zero road tax rate, but it does not prevent anyone from maintaining the taxation of trucks. I am convinced that in the Czech Republic, the abolition of the remainder of road tax would benefit both small and medium-sized enterprises and the state, which is forced to administer this budget-poor tax in a costly manner,” minister Stanjura concluded.

Main results

Basel III

The Council agreed its position (general approach) on the two remaining legislative acts for the implementation of the Basel III agreement, reform measures intended to help reinforce the resilience of the EU banking sector and strengthen its supervision and risk management.

We are boosting the strength and resilience of banks operating in the Union. As we are finalising the implementation of the international Basel III reforms, it is important that we take into account the specificities of the EU banking sector and the specific situation in our member states. I am confident that the updated texts which we agreed today aim to achieve these objectives.

Zbyněk Stanjura, Minister of Finance of Czechia

Eurovignette : taxation of trucks

The Council discussed those parts of the Eurovignette directive which concern the taxation of heavy goods vehicles for the use of road infrastructures.

We had a good discussion on how to amend current taxation rules in order to best achieve our shared objectives: encourage cleaner road transport and reduce congestion. It is important that we remove any obstacles which remain for member states to fully apply the ‘polluter pays’ and ‘user pays’ principles for trucks. While we made good progress, this issue is complex and will require further work.

Zbyněk Stanjura, Minister of Finance of Czechia

War in Ukraine

Ministers discussed the economic and financial impact of the Russian aggression against Ukraine. Since the start of the war, this is a regular agenda item for Economic and Financial Affairs Council meetings.

Ministers gave political guidance regarding the way forward on a more structural solution for the EU’s financial assistance for Ukraine in 2023. They overwhelmingly underlined the urgency of this issue and favoured a framework providing the predictability and flexibility that would allow the Commission to mobilise resources through bond issuance within agreed budgetary limits. The aim is to start the monthly disbursements to Ukraine in January 2023.

The EU will stand by Ukraine for as long as it takes, also financially. As the President of the Council, I shared with my colleagues my personal experience from my visit to Kyiv last week. My goal is to set up regular disbursements to Ukraine starting from January 2023. If we want to meet this target, we must act very fast. Today, the ministers gave political guidance to the Commission so that it can propose the required legislative package without delay. We will spare no efforts to reach agreement on these proposals at the December meeting of the Economic and Financial Affairs Council.

Zbyněk Stanjura, Minister of Finance of Czechia

Recovery and Resilience Facility

Economy and finance ministers took stock of the implementation of the Recovery and Resilience Facility (RRF).

Financial services legislation

The presidency informed ministers on the state of play as regards current legislative proposals in the field of financial services.

Statistics

The Council approved conclusions on EU statistics, welcoming the response of the European Statistical System (ESS) to the need for new and timelier statistics prompted by the Russian war of aggression against Ukraine, notably with respect to statistics on energy, supply chains, migration and the labour market.

European Fiscal Board

The Chair of the European Fiscal Board (EFB) presented the EFB’s 2022 annual report.

US inflation reduction act

The Commission informed ministers on the inflation reduction act and on the consequences of this new US legislation for the EU.

International meetings

The Presidency and the Commission informed ministers on the outcome of the G20 meeting of Finance Ministers and Central Bank Governors on 12-13 October 2022 and the IMF annual meetings.

Taxation: revised code of conduct

As an item without discussion, EU finance ministers today agreed on a revised code of conduct for business taxation: a political, intergovernmental commitment by member states to apply reinforced screening rules when looking for and remedy tax measures that could be harmful to the tax bases of other member states.

We confirmed today our commitment to a fairer tax environment in the EU by reinforcing the rules we apply when tackling harmful tax practices in an evolving economy. Our experts in taxation constantly look out for harmful tax practices. Since starting its work in 1997, the code of conduct group succeeded in eliminating around 140 harmful tax practices within the EU. The code of conduct of business taxation has not been amended since 1997 and today´s agreement further improves its effectiveness also in the light of the recent international tax reform.

Zbyněk Stanjura, Minister of Finance of Czechia

Vanuatu

As an item without discussion, the Council today decided to fully suspend the visa waiver agreement with Vanuatu due to the risks posed by its investor citizenship schemes (‘golden passport’ schemes).

EU and EFTA ministers for finance and economy met on 8 November 2022 in Brussels

Meetings in the margins of Ecofin

In the margins of Ecofin, a macroeconomic dialogue meeting was held with social partners, focusing on energy prices.

At an annual dialogue between EU and EFTA ministers for finance and economy, participants exchanged views on energy prices and inflation in the context of the current geopolitical situation.

The Council also adopted without discussion the items on the lists of legislative and non-legislative A items.

Meeting information
  • Meeting n°3905
  • Brussels
  • 8 November 2022
  • 10:30
Preparatory documents
Outcome documents
Press releases

 

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