European Council

On 12 July 2016, the Council found that Portugal and Spain had not taken effective action in response to its recommendations on measures to correct their excessive deficits. 

It confirmed that they will not have reduced their deficits below 3% of GDP, the EU's reference value for government deficits, by the recommended deadline. And in both cases, it found the fiscal effort to fall significantly short of what was recommended. 

The Council's decisions will trigger sanctions under the excessive deficit procedure. They are based on article 126(8) of the Treaty on the Functioning of the European Union. 

The Commission has 20 days to recommend further Council decisions imposing fines. Those fines should amount to 0.2% of GDP, though Portugal and Spain can submit reasoned requests within 10 days for a reduction of the fines. The Council will have 10 days to approve the fines. 

"I am sure that we will have a smart, intelligent result at the end”, said Peter Kažimír, minister for finance of Slovakia and president of the Council.

In April 2011 however, after several months of market pressure on its sovereign bonds, Portugal requested assistance from international lenders. It obtained a €78 billion package of loans from the EU, the euro area and the IMF. In October 2012, the Council extended the deadline for correcting Portugal's deficit by one year to 2014, in the light of the recession that the country faced. 

Economic prospects deteriorated further, and Portugal's general government deficit reached 6.4% of GDP in 2012. In June 2013, the Council extended the deadline for correcting the deficit by another year, to 2015. It set headline deficit targets of 5.5% of GDP in 2013, 4.0% of GDP in 2014 and 2.5% of GDP in 2015, consistent with 0.6%, 1.4% and 0.5% of GDP improvements in the structural balance respectively. 

Portugal exited its economic adjustment programme in June 2014. 

However its general government deficit came out at 4.4% of GDP in 2015, and the deadline was missed for correcting the deficit. The overshoot was largely due to a financial sector support measure (resolution of Banif), though the deficit net of one-off measures would in any case have been above 3% of GDP. The cumulative improvement in Portugal's structural balance in the 2013‑15 period is estimated by the Commission at 1.1% of GDP, significantly below the 2.5% recommended by the Council. When adjusted in the light of revised potential output growth and revenue windfalls or shortfalls, it is even slightly negative. 

Overall, since June 2014 the improvement in Portugal's headline deficit has been driven by economic recovery and reduced interest expenditure in a low-interest-rate environment. The country's general government gross debt has broadly stabilised. It amounted to 129.2% of GDP at the end of 2013, 130.2% of GDP in 2014 and 129.0% of GDP in 2015, according to the Commission's spring 2016 economic forecast. 

The Council concluded that Portugal 's response to its June 2013 recommendation has been insufficient. Portugal didn't correct its deficit by 2015 as required, and its fiscal effort falls significantly short of what was recommended by the Council. 

Spain has been subject to an excessive deficit procedure since April 2009, when the Council issued a recommendation calling for its deficit to be corrected by 2012. 

In December 2009 however, the Council extended the deadline to 2013. The Commission forecast that Spain's 2009 deficit would reach 11,2 % of GDP, five percentage points more than its previous estimate. 

In July 2012, the Council extended the deadline for a further year to 2014 on account of renewed adverse economic circumstances. The Commission projected that Spain's general government deficit would reach 6.3% of GDP in 2012, compared to the 5.3% previously expected. 

Also in July 2012, the euro area member states agreed to provide up to €100 billion of loans for the recapitalisation of Spain's financial services industry. 

In June 2013, the Council found that Spain fulfilled the conditions for extending the deadline for correcting its deficit by a further two years, setting a new deadline of 2016. It set headline deficit targets of 6.5% of GDP for 2013, 5.8% of GDP for 2014, 4.2% of GDP for 2015 and 2.8% of GDP for 2016, consistent with 1.1%, 0.8%, 0.8% and 1.2% of GDP improvements in the structural balance respectively. 

Spain exited the financial assistance programme for the recapitalisation of its financial institutions in January 2014. It had used close to €38.9 billion for bank recapitalisation, plus around €2.5 billion for capitalising the country's asset management company. 

Spain's general government deficit amounted to 5.9% of GDP in 2014 and 5.1% of GDP in 2015. above the intermediate targets set by the Council. A relaxation of fiscal policy in 2015 had a large impact on the fiscal outcome. The cumulative improvement in the structural balance over the 2013‑15 period amounted to 0.6% of GDP, significantly below the 2.7% recommended by the Council. When adjusted in the light of revised potential output growth and revenue windfalls or shortfalls, it is even lower. 

Over the 2013‑15 period, low or even negative inflation made achievement of the fiscal targets more difficult, but this was largely offset by higher-than-expected real GDP growth. A low interest rate environment has also helped Spain reduce its deficit. The Commission's 2016 spring economic forecast projects a general government deficit of 3.9% of GDP in 2016 and 3.1% of GDP in 2017. Spain is therefore not set to correct its deficit in 2016 as required. The debt-to-GDP ratio declined from 99.3% in 2014 to 99.2% in 2015, thanks to sales of financial assets. According to the Commission's 2016 spring forecast, the debt ratio is expected to rise to 100.3% in 2016 and decline thereafter. 

The Council concluded that Spain 's response to its June 2013 recommendation has been insufficient. Spain didn't reach the intermediate target set for its headline deficit in 2015 and is not forecast to correct its deficit by 2016 as required. Its fiscal effort falls significantly short of what was recommended by the Council, and it even relaxed its fiscal stance in 2015. 

 On 12 July 2016, the Council issued recommendations on economic, employment and fiscal policies planned by the member states. 

The Council thereby concluded the 2016 "European Semester", an annual policy monitoring process. The European Council endorsed the recommendations at its meeting in June. 

"We look forward to the effective implementation of these country-specific recommendations in the coming months“, said Peter Kažimír, minister for finance of Slovakia and president of the Council. 

In March 2016, the European Council endorsed the following priorities: 

• relaunching investment;
• pursuing structural reforms to modernise European economies;
• conducting responsible fiscal policies.

The European Semester involves simultaneous monitoring of member states' economic and fiscal policies during a roughly six-month period every year. 

In the light of policy guidance given by the European Council annually in March, the member states present each year in April: 

• National reform programmes for their economic and employment policies. These set out a macroeconomic scenario for the medium term, national targets for implementing the "Europe 2020" strategy for jobs and growth, identification of the main obstacles to growth, and measures for growth-enhancing initiatives in the short term. 
• Stability or convergence programmes for their fiscal policies. Eurozone countries present stability programmes, whereas non-euro member states present convergence programmes. These set out medium-term budgetary objectives, the main assumptions about expected economic developments, a description of fiscal and economic policy measures, and an analysis of how changes in assumptions are susceptible to affect fiscal and debt positions. 

The Council then adopts country-specific recommendations (CSRs). It provides explanations in cases where the recommendations do not correspond with those proposed by the Commission. 

The 2016 CSRs are addressed to 27 of the EU's 28 member states. To avoid duplication there is no CSR for Greece, as it is subject to a macroeconomic adjustment programme. 

In March 2016, the Council adopted a specific recommendation on the economic policies of the euro area. It did so at an earlier stage than in previous years, to take greater account of eurozone issues when approving the recommendations for the eurozone member states.

The recommendations were adopted at a meeting of the Economic and Financial Affairs Council. 

On 12 July 2016, the Council adopted new rules addressing some of the practices most commonly used by large companies to reduce their tax liability. 

The directive is part of a January 2016 package of Commission proposals to strengthen rules against corporate tax avoidance. The package builds on 2015 OECD recommendations to address tax base erosion and profit shifting (BEPS), endorsed by G20 leaders in November 2015. 

"This new directive aims to protect our domestic corporate tax bases against aggressive tax planning practices that directly affect the functioning of the internal market", said Peter Kažimír, minister for finance of Slovakia and president of the Council. "It is therefore an important step, which also demonstrates that we see the fight against such practices not only as our common priority but also our common commitment.“ 

The directive addresses situations where corporates, mostly multinational groups, take advantage of disparities between national tax systems in order to reduce their tax bills. It responds to the perception of many taxpayers and SMEs that some multinationals do not pay their fair share of tax, thereby distorting tax competition within the EU's single market.

The directive covers all taxpayers that are subject to corporate tax in a member states, including subsidiaries of companies based in third countries. It lays down anti-tax-avoidance rules for situations that may arise in five specific fields: 

• Interest limitation rules. Multinational groups may artificially shift their debt to jurisdictions with more generous deductibility rules. The directive sets out to discourage this practice by limiting the amount of interest that the taxpayer is entitled to deduct in a tax year.
• Exit taxation rules, to prevent tax base erosion in the state of origin. Corporate taxpayers may try to reduce their tax bills by moving their tax residence and/or assets, merely for aggressive tax planning purposes.
• General anti-abuse rule. This rule is intended to cover gaps that may exist in a country's specific anti-abuse rules, and thereby enable tax authorities to deny taxpayers the benefit of any abusive tax arrangements that may occur.
• Controlled foreign company (CFC) rules. In order to reduce their overall tax liability, corporate groups can shift large amounts of profits towards controlled subsidiaries in low-tax jurisdictions. CFC rules reattribute the income of a low-taxed controlled foreign subsidiary to its - usually more highly taxed - parent company.
• Rules on hybrid mismatches. Corporate taxpayers may take advantage of disparities between national tax systems in order to reduce their overall tax liability, for instance through double deductions. 

The directive will ensure that the OECD anti-BEPS measures are implemented in a coordinated manner in the EU, including by 6 member states that are not OECD members. 

Three of the five areas covered by the directive implement OECD recommendations, namely the interest limitation rules, the CFC rules and the rules on hybrid mismatches. The two others, i.e. the general anti-abuse rule and the exit taxation rules, deal with anti-tax-avoidance aspects of a 2011 proposal for an EU common consolidated corporate tax base. 

The directive was adopted without discussion at a meeting of the Economic and Financial Affairs Council. Political agreement was reached on 17 June 2016, following a silence procedure. 

The member states will have until 31 December 2018 to transpose it into their national laws and regulations, except for the exit taxation rules, for which they will have until 31 December 2019. Member states that have targeted rules that are equally effective to the interest limitation rules may apply them until the OECD reaches agreement on a minimum standard, or until 1 January 2024 at the latest. 

Work has proceeded meanwhile on the rest of the January 2016 anti-tax-avoidance package. On 25 May, the Council approved: 

• a directive on the exchange of tax-related information on multinational companies;
• conclusions on the third country aspects of tax transparency. 

The anti-tax-avoidance package follows on from a number of EU initiatives in 2015. These include a directive, adopted in December 2015, on cross-border tax rulings. 

In December 2014, the European Council cited “an urgent need to advance efforts in the fight against tax avoidance and aggressive tax planning, both at the global and EU levels”.

On 12 July 2016, the European Union and Monaco signed an agreement aimed at improving tax compliance by private savers. 

The agreement will contribute to efforts to clamp down on tax evasion, by requiring the EU member states and Monaco to exchange information automatically. 

This will allow their tax administrations improved cross-border access to information on the financial accounts of each other's residents. 

The agreement upgrades a 2004 agreement that ensured that Monaco applied measures equivalent to those in an EU directive on the taxation of savings income. The aim is to extend the automatic exchange of information on financial accounts in order to prevent taxpayers from hiding capital representing income or assets for which tax has not been paid.

The text was signed in Brussels: 

• on behalf of the EU, by Peter Kažimír, minister for finance of Slovakia and president of the Council;
• on behalf of Monaco, by Serge Telle, minister of state.

 The signature took place in the presence of Pierre Moscovici, commissioner for economic and financial affairs, taxation and customs, who also signed the document. 

The Council adopted a decision on 12 July 2016 to authorise the signature on behalf of the EU. 

The agreement ensures that Monaco applies strengthened measures that are equivalent to measures in force in the EU. However, whereas the 2004 agreement was based on the EU's taxation savings directive, that directive has now been repealed. Directive 2003/48/EC was repealed in November 2015 in order to eliminate an overlap with directive 2014/107/EU, which includes strengthened provisions to prevent tax evasion. 

The agreement also complies with the automatic exchange of financial account information promoted by a 2014 OECD global standard. 

The EU signed similar agreements with Switzerland on 27 May 2015, Liechtenstein on 28 October 2015, San Marino on 8 December 2015 and Andorra on 12 February 2016. It approved the conclusion of the agreements with Switzerland and Liechtenstein on 8 December 2015 and San Marino on 16 April 2016. 

The agreement sets out to limit the opportunities for taxpayers to avoid being reported to the tax authorities by shifting assets. Information to be exchanged concerns not only income such as interest and dividends, but also account balances and proceeds from the sale of financial assets. 

Tax administrations in the member states and in Monaco will be able to: 

• identify correctly and unequivocally the taxpayers concerned;
• administer and enforce their tax laws in cross-border situations;
• assess the likelihood of tax evasion being perpetrated;
• avoid unnecessary further investigations.

 The EU and Monaco must now ratify or approve the agreement in time to enable its entry into force. The parties will strive to enable entry into force on 1 January 2017. 

The greatness of a country is not determined by its area, the greatness of a country is not determined by its population. Today we speak of Slovakian greatness not by measuring it in square kilometres, nor based on demographic statistics, but by evaluating the results of your work, your determination, patience and wisdom.

You have demonstrated these attributes since the beginning of your indeed challenging history. You have built your independence with patience and wisdom, and with equally great determination you have built your position in Europe. You have shown everyone what it means to be proud. You asked no alms of anyone. You didn't want anything for free. You demanded only respect and understanding for your ambitions. Great, but justified ambitions. And today you quite rightly enjoy the respect and recognition of all of Europe, all of the international community.

You have also proved that despite difficult historical and political circumstances you are able to build good relations with all your neighbours. I appreciate this ability of yours not only as the President of the European Council, but also as a Pole. In tough times for Europe, your responsibility, resourcefulness and common sense can set an example for others.

That is why I am happy that it is Slovakia that for the first time takes up the EU presidency. From this moment on, a great responsibility lies with you, both for the daily management of Europe for the next six months as well as for the process of revitalisation of our community. It is Bratislava that in September will host the 27 European leaders who will be debating the future of post-Brexit Europe.

Looking at how much you have achieved over the past years, and how you are coping in this critical moment for Europe, I have to say that the EU couldn't wish for a better presidency.

(The speech was delivered in Slovak.)

Monday 4 July 2016
13.00 Meeting with President of Argentina Mauricio Macri (photo opportunity)

Tuesday 5 July 2016
Strasbourg
09.15 Report to the European Parliament on the European Council of 28 June and the informal meeting of 27 EU leaders on 29 June 2016

Friday 8 July 2016
Warsaw
EU-US leaders' meeting

EU-NATO cooperation event

NATO SUMMIT
14.30 Welcome by NATO Secretary-General Jens Stoltenberg and President of Poland Andrzej Duda
15.15 Family photo
20.30 Intervention at the North Atlantic Council working dinner hosted by President of Poland Andrzej Duda and chaired by NATO Secretary-General Jens Stoltenberg

Saturday 9 July 2016
Warsaw
NATO SUMMIT
09.00 Intervention at the summit meeting on Afghanistan
12.00 North Atlantic Council meeting

On 30 June 2016 the Council and the European Parliament reached a provisional agreement on a directive to reduce emissions of air pollutants. This so-called new NEC Directive sets stricter national limits from 2020 to 2029 and from 2030 onwards. 

"With this directive we will combat air pollution, a killer that annually causes over 400 000 premature deaths. The reduction of emissions of certain pollutants will ensure substantial health benefits. I am very pleased that after years of negotiations we were able to reach this agreement on the last day of the Dutch presidency, for all the people in Europe".

Sharon Dijksma, Dutch Minister for the Environment and president of the Council

The aim of this directive is to further address the health risks and environmental impact of air pollution. It is also meant to align EU law with international commitments (following the revision of the Gothenburg Protocol in 2012).

The new directive set national limits for the emissions of five pollutants: sulphur dioxide, nitrogen oxides, non-methane volatile organic compounds, ammonia and fine particulate matter.

The national emission limits for each pollutant from 2020 to 2029 are identical to those to which the member states are already committed  in the revised Gothenburg protocol. New stricter reductions from 2030 have now been agreed.

With the new commitments, the health impact of air pollution is estimated to be reduced by about 50% in 2030 (compared to 2005).

Indicative emission levels for 2025 will be identified for each member state.  They will be determined on the basis of  a linear trajectory towards the emission limits that will apply from 2030. However, member states will have the possibility to follow a non-linear trajectory if this is more efficient.

If member states deviate from the trajectory planned, they will need to give the reasons and explain the actions they intend to take  in order to get back on track.

Some flexibility to comply with the limits is foreseen, under certain circumstances. For instance, if one year a member state cannot fulfil its commitment due to an exceptionally cold winter or dry summer, this country will have the possibility to average out annual emissions with those of the preceding and subsequent year.

The Commission presented its proposal as part of the 'Air quality package' in December 2013. This file follows the ordinary legislative procedure. The European Parliament voted its position on the proposed directive in October 2015. The Council agreed on a general approach in December 2015. This directive needs qualified majority to be adopted by the Council.

In June 2016 a compromise text proposed by the presidency of the Council was supported by Coreper. On 30 June the text was in principle accepted by the European Parliament.

The European Parliament is expected to vote it in the autumn. Then the text will be submitted to the Council for final adoption at first reading.

On 30 June 2016 the Council and the European Parliament agreed on revised rules for the fishing of deep sea species in the EU and CECAF waters.

The agreed draft regulation aims to ensure the sustainable exploitation of deep sea stocks while reducing the environmental impact of these fisheries.

The agreement, successfully concluded under the Netherlands Presidency, comes after four years of intense political and technical work, and is still subject to the approval of the Council's Permanent Representatives Committee (Coreper) and the European Parliament's committee on fisheries (PECH).

"The agreement reached today on the protection of deep-sea habitats includes a general ban on deep sea fishing with bottom trawls from 800 meters depth and a system for the protection of vulnerable marine ecosystems in areas where fishing under certain conditions is still allowed. This deal therefore strikes a good balance between the need to protect deep-sea habitats and a responsible exploitation by fishermen", said Martijn van Dam, minister for agriculture of the Netherlands and president of the Council.

The EU deep sea fishing regime regulates which operators are allowed to target deep sea species and sets the conditions under which member states can issue fishing authorisations for deep sea fisheries.

The agreement on revised rules strikes an ambitious balance between the commercial exploitation of certain deep water fish populations and their sustainability.

It does this through the introduction of innovative tools to manage the stocks such as:

• a 800 meter depth limit below which it will not be possible to fish with bottom trawls
• the setting of a geographical footprint based on historical criteria by which vessels will only be able to fish in those areas where they have done so during the reference period
• special protection measures for vulnerable marine eco-systems which apply to operations with bottom gears below a depth of 400 m
• boosted control measures based on the system applied by the management plans
• additional targeted data collection obligations aimed at ensuring a better picture of deep-sea stocks. Among these, of particular importance is an observer coverage of 20% applicable to EU vessels fishing with bottom trawls and bottom set gillnets in both EU and NEAFC waters

The Coreper will be invited to endorse the agreement, while the European Parliament is expected to vote on the compromise text at a future meeting of its PECH committee. Further steps will then be the formal adoption of the Council's position at first reading, reflecting the political agreement, and Parliament's identical second reading position in autumn.

This should enable the entry into force of the new legislation by the end of 2016.

The Fishery Committee for the Eastern Central Atlantic (CECAF) is the competent organisation responsible for recommending fisheries management measures for the international waters of the Eastern Central Atlantic to its Contracting Parties.

The purpose of the Committee is to promote the sustainable utilisation of the living marine resources within its area of competence by the proper management and development of the fisheries and fishing operations.

The North East Atlantic Fisheries Commission (NEAFC) is the competent organisation responsible for recommending fisheries management measures for the international waters of the North East Atlantic to its contracting parties. The latter include Denmark (in respect of the Faroe Islands and Greenland), the European Union, Iceland, Norway, and the Russian Federation. The objective of NEAFC is to ensure the long-term conservation and optimum utilisation of the fishery resources in its convention area, providing sustainable economic, environmental and social benefits.

On 30 June 2016 the Permanent Representatives Committee approved, on behalf of the Council, an agreement with the European Parliament concerning goods that can be used for capital punishment, torture or other cruel, inhuman or degrading treatment or punishment. 

The agreement will enable regulation 1236/2005 to be amended in the light of developments since it entered into force in 2006. It provides for amendments to the rules on export controls, new controls on brokering services and technical assistance, and a ban on advertising of certain goods. The aim is to prevent EU exports from contributing to human rights violations in third countries.

The new regulation amending regulation 1236/2005  is due to be approved by the Parliament in September, and will then be submitted to the Council for adoption. Political agreement with the Parliament was reached on 24 May 2016.

A ban on torture and ill-treatment is enshrined in United Nations conventions on human rights. At EU level, the Charter of Fundamental Rights prohibits capital punishment and provides that "no one shall be subjected to torture or to inhuman or degrading treatment or punishment". The EU also promotes respect for fundamental rights around the world. 

Regulation 1236/2005 bans the export and import of equipment/goods that can only be used for torture or capital punishment. Such goods are listed in annex II to the regulation. 

The regulation requires specific licences for exports of equipment/goods that could have such uses but which also have legitimate applications. Such goods are subject to a case-by-case assessment and are listed in annexes III and IIIA to the regulation. 

In December 2011, the regulation was amended to control the export of drugs that could be used in executions by lethal injection. 

The new regulation imposes a ban on the brokering of equipment that is subject to a ban and listed in annex II, so as to cover transfers of goods that are not located in the EU. It additionally bans the provision of brokering services by any broker who is aware that goods listed in annex III or IIIA may be used for torture or capital punishment. 

The draft also bans the supply of technical assistance (concerning goods listed in annex III or IIIA) by anyone who is aware that the equipment in question may be used for torture or capital punishment. 

It furthermore provides for an urgency procedure in case rapid amendment of the regulation's annexes is necessary when new goods enter the market. 

Under the agreement with the European Parliament, the agreed text: 

• introduces a prior authorisation regime for brokering services and technical assistance for annex III and IIIA goods, in place of the prohibition proposed by the Commission;
• prohibits the transit of goods listed in annex II and, if the transporter knows that the goods will be used for torture or capital punishment, for annex III and IIIA goods;
• prohibits the advertising and promotion at exhibitions and trade fairs of goods listed in annex II;
• establishes a coordination group, which will serve as a platform for member state experts and the Commission to exchange information on administrative practices. The group will also discuss questions of interpretation, developments and implementation of the regulation.

On 30 June 2016 the Permanent Representatives Committee approved, on behalf of the Council, an agreement with the European Parliament on institutions for occupational retirement provision (IORPs).

The draft directive is aimed at facilitating the development of IORPs and better protecting pension scheme members and beneficiaries.

The directive will improve the governance and transparency of IORPs and facilitate their cross-border activity. It revises directive 2003/41/EC on the activities and supervision of IORPs.

IORPs manage collective schemes for employers that provide retirement benefits for their employees. The revision of directive 2003/41/EC will reinforce their role as institutional investors and help channel long-term savings to growth-enhancing investments.

The directive has four objectives:

• clarifying cross-border activities of IORPs;
• ensuring good governance and risk management;
• providing clear and relevant information to members and beneficiaries;
• ensuring that supervisors have the necessary tools to effectively supervise IORPs.

Member states will have two years to transpose the directive into their national laws and regulations.

Provisional agreement with the European Parliament was reached on 15 June 2016. The directive is expected to be approved by the Parliament at first reading. It will then be submitted to the Council for adoption.

The fourth meeting of the Accession Conference with Montenegro at Deputy level was held today in Brussels to open two negotiating chapters: Chapter 12 - Food safety, veterinary and phytosanitary policy, and chapter 13 - Fisheries.

The European Union delegation was led by Ambassador Pieter de Gooijer, Permanent Representative of the Netherlands to the EU. The Montenegrin delegation was led by Ambassador Aleksandar Andrija Pejović, State Secretary for European Integration and Chief Negotiator for Negotiations on Accession of Montenegro to the European Union.

With today's conference, out of a total of 35 negotiating chapters, 24 chapters have now been opened for negotiations of which 2 chapters have already been provisionally closed.

The EU considered that some benchmarks were required to provisionally close both chapters. These include legislative amendments as well as the administrative capacity to implement and enforce the relevant acquis in the respective chapters.

For chapter 12, the benchmarks to be met are the following:

• Montenegro submits to the Commission an approved national programme for the upgrading of establishments for products of animal origin, including establishments for animal by-products. As regards the milk sector, the national programme should also include a strategy for the use of non-compliant raw milk.
• Montenegro provides to the Commission guarantees for the  establishment of an EU-compliant system for official controls of live animals and animal products, including its funding.
• Montenegro continues to set up and develop, in accordance with the acquis, the relevant administrative structures, in particular as regards food safety controls, and to further increase its administrative capacities and infrastructures. Montenegro demonstrates that it will have sufficient administrative capacity to correctly implement and apply all the acquis covered by this chapter upon accession.

 For chapter 13, the benchmarks to be met are the following:

• Montenegro adopts legislation that provides a substantial degree of alignment with the EU acquis for fisheries and ensures that Montenegro will be able to fully apply the Common Fisheries Policy upon accession.
• Montenegro substantially strengthens the administrative, inspection and control capacity required by the Common Fisheries Policy and ensures that EU requirements will be fully met at the date of accession, in particular as regards inspection and control.

The EU also underlined that it would devote particular attention to monitoring all specific issues mentioned in its common positions, with a view to ensuring Montenegro's administrative capacity and its   capacity to complete the legal alignment in the relevant areas.

Monitoring of progress in the alignment with and implementation of the acquis will continue throughout the negotiations. A final assessment of the conformity of Montenegro's legislation with the acquis and of its implementation capacity can be made only at a later stage of the negotiations. The Conference will have to return to these chapters at an appropriate moment.

                                                                       ***

The next Accession Conference is planned under the Slovak Presidency in order to take the process forward.

The twelfth meeting of the Accession Conference with Turkey at Ministerial level was held today in Brussels. The European Union delegation was headed by Bert Koenders, Minister of Foreign Affairs of Netherlands, on behalf of the Netherlands Presidency of the Council of the European Union. The European Commission was represented by Johannes Hahn, Commissioner for European Neighbourhood Policy and Enlargement Negotiations. The Turkish delegation was led by Ömer Çelik, Minister for EU Affairs and Chief Negotiator, accompanied by Mevlüt Çavuşoğlu, Minister of Foreign Affairs, and Naci Ağbal, Minister of Finance.

The Conference opened negotiations on Chapter 33 - Financial and budgetary provisions. This chapter covers the rules concerning the financial resources necessary for the funding of the EU budget ('own resources'). These resources are made up mainly from so-called traditional own resources from customs and agricultural duties and sugar levies, which are levied by the Member States on behalf of the EU; furthermore a resource based on value-added tax; and finally, a resource based on each Member State's gross national income. Member States must have appropriate administrative capacity to adequately co-ordinate and ensure the correct calculation, collection, payment and control of own resources. The acquis in this area is directly binding and does not require transposition into national law.

During the Conference, the EU extended condolences and reiterated its solidarity with Turkey following the terrorist attack in Istanbul last Tuesday, reaffirming its pledge to support fighting terrorism. The European Union also reiterated the importance it attaches to the close relations between the EU and Turkey, noting the close cooperation in a number of important areas of common interest, such as migration, counter-terrorism, energy, economy and trade. In line with the outcome of the EU-Turkey Leaders' meeting on 29 November 2015, and the EU-Turkey Statement of 18 March 2016, the EU welcomed a re-energizing of the accession process and confirmed its willingness to support Turkey in its reform efforts.  In this regard, the EU reiterated the need for swift reform efforts, particularly in the areas of rule of law and fundamental rights. In addition, the EU recalled that Turkey can accelerate the pace of negotiations by advancing in the fulfilment of benchmarks, by meeting the requirements of the Negotiating Framework, and by respecting its contractual obligations towards the EU.

Since the start of the accession negotiations on 3 October 2005, sixteen chapters have been opened, of which one has been provisionally closed.

For this chapter, the Union has closely examined Turkey's general state of preparedness. Taking into account Turkey's present state of preparations, and in line with the Council conclusions on 11 December 2006, 16 December 2014, 18 March 2016, other relevant Council conclusions and the Negotiating Framework, as confirmed by the European Council, the EU notes - as well as on the understanding that Turkey will continue to make progress in alignment with and implementation of the acquis - the EU communicated that the chapter may only be provisionally closed once agreement has been reached with regard to Turkey's request for “transitional financial corrective measures including compensation and assistance” as regards the EU Budget, and the main issues related to the closing benchmarks have been met by Turkey, including that:

• Turkey has fulfilled its obligations of full, non-discriminatory implementation of the Additional Protocol to the Association Agreement towards all Member States.
• Turkey increases its administrative capacity and coordination structure and to this end adopts an action plan in order to sufficiently prepare and introduce procedural rules to ensure that it will be able, from accession, to correctly calculate, forecast, account for, collect, pay, control and report to the EU on own resources in line with the acquis.

The EU also underlined that it would devote particular attention to monitoring all specific issues mentioned in its position with a view to ensuring Turkey's administrative capacity to ensure the correct calculation, forecast, collection, payment and control of own resources and reporting to the EU for implementation of the own resources rules.

On 1 July 2016, the Council prolonged the economic sanctions targeting specific sectors of the  Russian economy until 31 January 2017. 

These measures were introduced on 31 July 2014 initially for one year in response to Russia's actions destabilising the situation in Ukraine. They were reinforced in September 2014. They target  the financial, energy and defence sectors, and the area of dual-use goods. 

On 19 March 2015, the European Council agreed to link the duration of the sanctions to the complete implementation of the Minsk agreements, which was foreseen to take place by 31 December 2015.

Since the Minsk agreements were not fully implemented by 31 December 2015, the Council extended the sanctions until 31 July 2016. Having assessed the implementation of the Minsk agreements, the Council decided to renew the sanctions for a further six months, until 31 January 2017.

The economic sanctions prolonged with the decision notably: 

• limit access to EU primary and secondary capital markets for 5 major Russian majority state-owned financial institutions and their majority-owned subsidiaries established outside of the EU, as well as three major Russian energy and three defence companies;
• impose an export and import ban on trade in arms;
• establish an export ban for dual-use goods for military use or military end users in Russia;
• curtail Russian access to certain sensitive technologies and services  that can be used for oil production and exploration.

In addition to these economic sanctions, several EU measures are in place in response to the crisis in Ukraine including: 

• targeted individual restrictive measures, namely a visa ban and an asset freeze, currently against 146 people and 37 entities until 15 September 2016;
• restrictive measures in response to the illegal annexation of Crimea and Sevastopol, limited to the territory of Crimea and Sevastopol, currently in place until 23 June 2017.

The decision was adopted by written procedure and as it is the rule for all decisions on prolongation of restrictive measures, unanimously.

On 29 June 2016 the Council led by the Netherlands Presidency and the European Parliament reached a political agreement on a regulation amending the long-term plan for cod stocks from 2008, the so-called cod plan.

The agreed draft regulation discontinues the effort regime, recognising this is a main obstacle to introducing in full the landing obligation in the areas of the cod plan, and thereby granting more flexibility to fishermen. Furthermore in the agreed text the rules on allowable catch limits (TACs) are largely simplified, while the co-legislators await the Commission's proposal of a reform-based multiannual plan for the North Sea, which is expected to contain a chapter on specific targets and safeguards in this respect. Finally as regards the landing obligation, the Council and European Parliament underlined the importance of maintaining selectivity and discard reduction measures that were developed under the cod plan. Maintaining or further developing these measures should facilitate the phasing-in of the landing obligation in demersal fisheries which started in 2016.

The proposal for a new amended regulation establishing a long-term plan for cod stocks from 2008 was presented by the Commission in September 2012. The aim of the proposal was to amend the effort regime in the cod plan, modify the rules for setting TACs for data-poor stocks, and strengthen measures top address discards.

The European Parliament adopted a position at first reading on 11 June 2013 and a revised negotiating position on 7 June 2016 following the Court judgement on Joined Cases C 124/13 and C 125/13. On 22 June 2016 the Permanent Representatives Committee (Coreper) gave a revised mandate to the Presidency to enter into negotiations with the European Parliament.

The Coreper will be invited to endorse the agreement, while the European Parliament is expected to vote on the compromise text at a future meeting of its Fisheries committee (PECH), probably mid July. Further steps will then be the formal adoption of the Council's position at first reading, reflecting the political agreement, and Parliament's identical second reading position in autumn. The amendment is planned to be published in late autumn 2016, and to come into force at 1 January 2017.

The President of the European Council, Donald Tusk received the letters of credentials of the following Ambassadors:

H.E. Mrs Pema CHODEN, Ambassador, Head of the Mission of the Kingdom of Bhutan to the European Union
H.E. Mr Francisco TILMAN CEPEDA, Ambassador, Head of the Mission of the Democratic Republic of Timor-Leste to the European Union
H.E. Mr Mario Raúl VERÓN GUERRA, Ambassador, Head of the Mission of the Argentine Republic to the European Union

On 30 June, the Permanent Representatives Committee (Coreper) confirmed, on behalf of the Council, the agreement with the European Parliament on the directive on the right to legal aid for citizens suspected or accused of a criminal offence and for those subject to a European arrest warrant.  

The proposed directive lays down minimum rules concerning the right to legal aid for suspects or accused persons in criminal proceedings who are deprived of liberty, and in certain other situations. It also ensures that legal aid is made available in European arrest warrant proceedings, upon the arrest of the requested person in the executing State.

Minister van der Steur from the Netherlands presidency said : "I am very pleased that a political agreement has been reached during our Presidency. Furthermore, I want to thank the rapporteur, Mr De Jong, for the excellent cooperation which was instrumental in achieving this compromise. The directive will contribute to mutual trust between Member States. And I firmly belief that this trust will in turn lead to improved European cooperation in criminal cases."

The two institutions agreed on certain modifications to the proposal submitted by the Commission, so as to enhance the rights for citizens and make the text clearer, in particular with regards to: 

• the scope of application of the directive, which has been broadened to include a right to ordinary legal aid and not only to provisional legal aid. The ordinary legal aid includes  support at all stages of the criminal justice process, under the conditions set out in the directive, while the right to provisional legal aid was meant to cover only the initial stage of criminal proceedings before a final decision on legal aid is taken; 
• the inclusion of a means test and a merits test, which may be used to determine whether a person is eligible for legal aid. A "means test" aims at assessing whether the person effectively lacks sufficient resources to pay for legal assistance, while a "merits test" allows to assess whether the provision of legal aid would be in the interest of justice in the light of the circumstances of the case.  

The agreed text will now go through revision by lawyer-linguists before being finally adopted by the Council and Parliament towards the end of this year. 

The Directive includes a transposition delay of 30 months. 

The UK and Ireland decided not to "opt in" while Denmark has an “opt out” by default from justice and home affairs legislation. 

This directive is the last legal text foreseen as part the roadmap for strengthening procedural rights of suspected or accused persons in criminal proceedings adopted by the Council in November 2009. 

The objective of the roadmap was to ensure that any citizen involved in criminal proceedings in a Member State would benefit from certain minimum procedural rights across the European Union. This should also enhance mutual trust between judicial authorities in the European Union, and so encourage the application of instruments such as the European arrest warrant.  

Five other measures have already been adopted on the basis of the roadmap: 

•    the right to interpretation and translation (Directive 2010/64);
•    the right to information (Directive 2012/13);
•    the right of access to a lawyer (Directive 2013/48);
•    the presumption of innocence (Directive 2016/343); and
•    special safeguards for children (Directive (EU) 2016/800).

We, the Heads of State or Government of 27 Member States, as well as the Presidents of the European Council and the European Commission, deeply regret the outcome of the referendum in the UK but we respect the will expressed by a majority of the British people. Until the UK leaves the EU, EU law continues to apply to and within the UK, both when it comes to rights and obligations.

Good afternoon. Today 27 EU leaders discussed the consequences of the British referendum for Europe. It was a calm and serious discussion, as it is a serious moment in our common history. Certainly one issue is clear from our debate. Leaders are absolutely determined to remain united and work closely together as 27.

We reconfirmed that Britain's withdrawal from the European Union must be orderly and there will be no negotiations of any kind until the UK formally notifies its intention to withdraw. We hope to have the UK as a close partner in the future. It is up to the British government to notify the European Council of the UK intentions to withdraw from the EU. Leaders made it crystal clear today that access to the single market requires acceptance of all four freedoms, including the freedom of movement. There will be no single market "à la carte".

We also discussed the fact that too many people in Europe are unhappy with the current state of affairs and who expect us to do better. Many recalled that for decades Europe was bringing hope and that we have a responsibility to return to that.

As you know it was a first exchange of 27 leaders after the British referendum and so it would be too early to draw conclusions. This is why we have started a political reflection on the future of EU with 27 states and will meet on 16 September in Bratislava to continue talks. Thank you.

Before anything else, let me express my deepest condolences to the families and loved ones of the victims of tonight's attacks at Ataturk International Airport in Istanbul. In times like these we should all be united.  

As you can imagine this was very much a British European Council. And not only because of Brexit. Most of the other issues discussed were also "British".

Leaders took important decisions on the single market, the digital market, the capital markets union, on stemming irregular migration and on closer cooperation with NATO.

We agreed to step up work with African countries on returns of irregular migrants, and on measures that would stabilise the situation in Libya. EU- NATO co-operation was discussed in the presence of Jens Stoltenberg ahead of the Warsaw Summit and we agreed to enhance our relationship given unprecedented challenges from the South and East. We decided on steps to deepen the Single Market further, especially when it comes to the digital market. We will also continue to develop the capital markets union despite the recent turmoil.

Most importantly, Prime Minister Cameron outlined the results of Thursday's referendum. Respecting the will of the British people, we all recognized that a process of orderly exit was in everyone's, and especially, in the UK's interest. Prime Minister Cameron undertook that the decision to trigger Article 50 of the Treaty on European Union be taken by the new leadership in Britain. Our discussions were calm and measured. Leaders understand that some time is now needed to allow the dust to settle in the UK. But they also expect the intentions of the UK government to be specified as soon as possible. This was a very clear message which I believe Prime Minister Cameron will take back to London.

We also considered the post-Brexit economic situation in the presence of the European Central Bank President, who reassured us about the good and constant cooperation of central banks. However, it was also made clear that Brexit means substantially lower growth in the UK, with a possible negative spillover all over the world.

Finally, let me thank Prime Minister Rutte, who is finalising his presidency. Mark, thank you for your professional and hard work on migration and particularly on our deal with Turkey, but also for your key role in making the single market move forward. Talking about referendums and the Netherlands I would like to mention that the European Council also discussed the ratification of the DCFTA (Deep and Comprehensive Free Trade Area) for Ukraine. Leaders agreed to do their best to find a legally-binding solution that would allow Prime Minister Rutte to proceed with this ratification.

Tomorrow we will launch a discussion, in fact, a reflection process to give an impulse on the future of the EU. It will be our first informal meeting without the UK, among the 27 States. Thank you.

Monday 20 June 2016
Lisbon
11.30 Meeting with Prime Minister António Costa
12.45 Press conference
13.15 Working lunch
15.00 Meeting with President Marcelo Rebelo de Sousa

Tuesday 21 June 2016
10.00 Meeting with President of Israel Reuven Rivlin (photo opportunity - press statements ±11.00)
6-month badge/special accreditation will be required to access the Justus Lipsius VIP entrance
15.00 Meeting with Minister of Foreign Affairs of the Netherlands Bert Koenders

Wednesday 22 June 2016
15.30 Meeting with Federal Chancellor of Austria Christian Kern (photo opportunity)

Thursday 23 June 2016
12.45 Meeting with Palestinian President Mahmoud Abbas (photo opportunity - press statements ±13.15)
6-month badge/special accreditation will be required to access the Justus Lipsius VIP entrance

Friday 24 June 2016
10.30 Meeting with European Parliament President Martin Schulz, Prime Minister of the Netherlands Mark Rutte and European Commission President Jean-Claude Juncker (Berlaymont)