A meeting of the Economic and Financial Affairs Council (ECOFIN) was held today in Brussels.

During the meeting, Ministers reached a general approach agreement on two proposals to amend the capital requirement rules for banks and investment firms at a European level.

The proposals amend and replace the existing Capital Requirement Directive (CRD) and divide them into two new legislative instruments: a Regulation establishing prudential requirements that financial institutions need to respect and a Directive governing access to deposit-taking activities.

The objective of this legislative package is to strengthen the governance and supervision requirements of financial institutions and therefore increase the resilience of the EU’s banks. It also aims to transpose the agreement reached by the Basel Committee on Banking Supervision, as endorsed by the G20 leaders.

During the meeting, the Commission also presented its draft EU general budget for 2013. The draft budget provides for payments set at €137.9 billion and commitments of €150.9 billion.

The Minister of Finance, the Economy and Investment, Tonio Fenech, welcomed the Commission’s proposal, particularly its focus on growth and investment at the European level. Together with a number of like-minded Member States, who also form part of the ‘Friends of Cohesion’ group, Malta signed a joint statement to support the Commission’s proposal for securing sufficient payments in the 2013 budget for Cohesion Policy.

Ministers also adopted Council Conclusions endorsing the ‘2012 Ageing Report’ which was jointly prepared by the Economic Policy Committee and the European Commission. The report addresses age-related expenditure projections for Member States up the 2060.

It examines the sustainability of public expenditure in individual countries in pensions, health care, long-term care, education and unemployment benefits. In the Council Conclusions, Ministers highlighted the need for action to minimise the challenges posed by expenditure related to ageing.

Finally, the meeting also discussed a mandate for the Commission to enter into negotiations with Switzerland, Liechtenstein, Monaco, Andorra and San Marino for new agreements on the taxation of savings income.

The proposed mandate, which is based on the latest compromise text of a draft parallel proposal for an amended EU Savings Tax Directive, seeks to broaden the scope of the agreement which is currently in force, extending it to all savings income. As it stands, both the current Directive and the agreements with the above-mentioned countries only apply to interest payments made to regular bank savings accounts.

The ECOFIN Council meeting was preceded by a meeting of the Eurogroup, which was held on 14 May. The meeting discussed both the situation in Greece following the country’s election as well as the economic and fiscal challenges facing Spain.

During the Council meeting Malta’s delegation was led by the Minister of Finance, the Economy and Investment, Tonio Fenech. He was accompanied by Mr Alfred Camilleri, Permanent Secretary in the Ministry of Finance, the Economy and Investment.

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