European Council

Monday 30 May 2016
Luxembourg
17.00 Speech at the event marking the 40th anniversary of European People Party (EPP)

Wednesday 1 June 2016
10.30 Meeting with Prime Minister of Slovakia Robert Fico (photo opportunity)
17.30 Speech at the European Business Summit (Palais d'Egmont)

Preamble

We, the leaders of the G7, met in Ise-Shima on 26 and 27 May 2016 to address major global economic and political challenges. Global growth remains moderate and below potential, while risks of weak growth persist. Escalated geo-political conflicts, terrorism and refugee flows complicate the global economic environment. The rise of violent extremism, terrorist attacks and other challenges, pose serious threat to the existing rule based international order, as well as to common values and principles for all humanity.

The G7 has a special responsibility to lead international efforts to tackle these challenges. We remain bound together as a group guided by our common values and principles, including freedom, democracy, the rule of law and respect for human rights. Furthermore, following the adoption of the 2030 Agenda for Sustainable Development (2030 Agenda) and the Paris Agreement on climate change last year, we will further make efforts to implement our commitments. Today, we have demonstrated our capacity to make tangible progress on a broad range of economic, security, and development policy issues, and we will demonstrate through our actions, a path forward in solving major issues to ensure peace, security and prosperity of the world.

Monday 30 May

Place: Justus Lipsius building, Brussels
Chair(s):
Martin van Rijn, State Secretary for Health, Welfare and Sport of the Netherlands
Jet Bussemaker, minister for Education, Culture and Science of the Netherlands

All times are approximate and subject to change

Youth

+/- 08.00
Arrivals

+/- 08.30
Breakfast: structured dialogue Youth

+/- 09.45
Doorstep by Martin van Rijn

+/- 10.45
Doorstep by Jet Bussemaker

+/- 10.00
Beginning of Council meeting
- Adoption of the agenda
- Approval of legislative A items (in public session)
- Approval of non-legislative A items
- Preventing and combating violent radicalisation of young people
- The role of youth policy and the youth sector in an integrated approach to support youth in their identity development (in public session)
- Work programme of the incoming Presidency

+/- 13.00
Working lunch with Education ministers

+/- 14.30
Press conference

Education

+/- 15.00
Beginning of Council meeting
- Introduction
- Developing media literacy and critical thinking through education and training
- Pursuing the modernisation agenda for higher education in Europe (in public session)
- AOB:
 - New Skills Agenda for Europe
 - Ministerial meetings to be organised in Cyprus
 - Summer School “Beyond the refugee crisis - Studying in Europe”
 - Work Programme of the incoming Presidency

Tuesday 31 May

Place: Justus Lipsius building, Brussels
Chair(s):
Jet Bussemaker, minister for Education, Culture and Science of the Netherlands
Edith Schippers minister for Health, Welfare and Sport of the Netherlands

All times are approximate and subject to change

Culture / Audiovisual

+/- 08.30
Arrivals

+/- 08.45
Doorstep by Jet Bussemaker

+/- 09.30
Beginning of Council meeting
- Introduction
- The role of Europeana for the digital access, visibility and use of European cultural heritage
- Work Plan for Culture (2015-2015) as regards the priority on intercultural dialogue
- Proposal for a revision of the Audiovisual Media Services Directive (in public session)
- Revision of the Audiovisual Media Services Directive and the promotion of European audiovisual content (in public session)
- AOB:
 - European Year of Cultural Heritage (2018)
 - Interoperability of digital content
 - Limit for cultural projects under the ERDF
 - European Youth Orchestra
 - Court decisions on copyright law 
 - Work Programme of the incoming Presidency

+/- 13.00
Doorstep by Edith Schippers

+/- 13.15
Press conference

Sport

+/- 14.00
Beginning of Council meeting
- Introduction
- Enhancing integrity, transparency and good governance in major sport events
- Improving governance in sport (in public session)
- AOB:
 - World Anti-Doping meetings
 - The European Week of Sport
 - Recent Commission studies
 - Work Programme of the incoming Presidency

+/- 16.00
Structured dialogue with sport representatives

+/- 18.00
Press conference

On 26 May 2016 the Council adopted the following conclusions:

Following a policy debate on better regulation to strengthen competitiveness, the Council adopted the following conclusions:

“THE COUNCIL:

ACKNOWLEDGES that better regulation is a key driver for delivering economic growth and fostering innovation, competitiveness, SMEs and job creation, and for a fully functioning Single Market. REITERATES the need to ensure that EU regulation is transparent, simple and is achieved at minimum cost, and to always take into account a high level of protection of consumers, health, the environment and employees.

WELCOMES the Commission Communication “Better Regulation for better results, an EU agenda” of 19 May 2015[1] and the Interinstitutional Agreement by the European Parliament, the Council and the Commission on "Better Law-making" of 13 April 2016.[2]

Future proof and innovation-friendly legislation

1)      UNDERLINES the importance of a sound regulatory framework conducive to research, innovation and competitiveness, and WELCOMES the Commission's commitment to address the issue of future proof, fit for purpose and research and innovation-friendly legislation as part of the implementation of its better regulation guidelines and toolbox.

2)      STRESSES that, when considering, developing or updating EU policy or regulatory measures, the 'Innovation Principle' should be applied, which entails taking into account the impact on research and innovation in the process of developing and reviewing regulation in all policy domains. CALLS on the Commission together with Member States, to further determine its use and to evaluate its potential impact.[3]

3)      In this respect, CALLS on the Commission and Member States to explore and exchange best practices as to how regulation can be made more future proof and enabling for research and innovation, making good use of existing concepts and practices from the Commission and Member States. These may include risk- and hazard-based approaches to regulation, the use of goal or outcome oriented legislation, the use of digital tools, possibilities for experimentation[4], and flexibility.[5]INVITES the Commission to assist in collecting the outcome of this exploration in the first half of 2017, including the experience of using the research and innovation and ICT assessment tools[6] in Impact Assessments.

4)      WELCOMES the Commission's commitment to address the issue of future proof, fit for purpose and research and innovation-friendly legislation also when dealing with existing legislation in the framework of the REFIT programme; SUGGESTS a review (for instance by a fitness check) on how regulation can be made more innovation-friendly and on how the regulatory framework can be made more supportive for the digitisation of industry, also on the basis of input from stakeholders on identified regulatory barriers to their innovation projects and actions, and (new) business models, such as through the recent call from the Commission on this topic. CALLS on the Commission and Member States to include the perspective of research and innovation-friendly and future proof regulation as part of their discussions on existing regulation within REFIT. HIGHLIGHTS the importance of single market rules that facilitate the scale-up of innovative European businesses that wish to offer goods and services across borders and/or establish in other Member States; WELCOMES the Commission's intention for the REFIT platform to assess suggestions from stakeholders on regulatory barriers to digitisation and innovation.

Impact Assessment and Quantification of costs and benefits

5)      UNDERLINES the importance of measuring the impact of EU regulation, taking into account both the costs and benefits, including long-term benefits for both society and business whenever possible the cost of non-Europe, the impact on competitiveness, the administrative and other regulatory burdens of the different options, and with full respect given to the principles of subsidiarity and proportionality, in line with the Inter-institutional Agreement on better law-making. STRESSES that quantified estimates of impacts should not be a goal in itself but be a tool for better policy-making and should as much as possible be available at the early stage of consultation. RECALLS the importance of cooperation between the Commission and Member States in ensuring that the information and data needed to monitor and evaluate the implementation of EU law is obtained while minimising additional administrative burden for business and Member States.

6        ENCOURAGES the Commission to be transparent on the criteria used to determine when legislative and non-legislative proposals of the Commission are expected to have significant impact and therefore an Impact Assessment will be undertaken by the Commission. ENCOURAGES the Commission to be transparent and predictable in which cases quantification of costs and benefits are is undertaken within the Commission's Impact Assessments, and the reasons for this.

7)      WELCOMES the Commission's commitment in the Interinstitutional Agreement to further quantification of its simplification and administrative burdens reduction efforts, to present an annual burden survey and, where possible, to quantify the regulatory burden reduction or savings potential of individual proposals or legal acts; INVITES the Commission to include in the annual burden survey figures on the increase or reduction in burden of new legislation over the previous year.

8)      CALLS on the Commission to continue its work on quantification of the burden reduction efforts by quantifying where feasible ex ante the expected results of the proposed initiatives in the REFIT scoreboard, based inter alia on impact assessments and existing methods, and making good use of available information from Member States and stakeholders. CALLS on the Commission to present the first results of its efforts to quantify the REFIT scoreboard and its annual burden survey in the first half of 2017.

Reduction Targets

9)      RECALLS the Council Conclusions of December 2014[7] that call on the Commission to develop and put in place - on the basis of input from Member States and stakeholders - reduction targets in particularly burdensome areas, especially for SMEs, within the REFIT Programme, which would not require baseline measurement and should consider at the same time the costs and benefits of regulation; WELCOMES the Commission's recent commitment in this regard, and URGES the Commission to rapidly proceed on this to enable the introduction of reduction targets in 2017, whilst always taking into account a high level of protection of consumers, health, the environment and employees and the importance of a fully functioning Single Market. UNDERLINES that such targets should be well-defined, pragmatic and sound, and should focus on sectors or sets of regulation that are particularly burdensome, areas relevant for SMEs and with strong potential for innovation, and fitting within the current REFIT priorities.

Better Regulation and SMEs

10)    STRESSES the economic importance of SMEs and micro-enterprises, notably for the creation of jobs. STRESSES the need for the better regulation policy and REFIT actions to address the needs of SMEs and in particular micro-enterprises; and UNDERLINES the importance of the rigorous application of the “Think Small First” principle and SME tests throughout the whole EU policy cycle in an integrated and balanced way and SUGGESTS for the European Parliament, the Commission and the Council to exchange information on best practices, methodologies and data in this area.

11)    WELCOMES the Commission's commitment to assess the impacts on SMEs in all impact assessments, and UNDERLINES the importance for the Commission in principle not to adopt legislative proposals in the absence of a positive opinion of the Regulatory Scrutiny Board on the respective draft Impact Assessments including the impact on SMEs.

12)    CALLS on the Commission to ensure that measurements of impact of regulation on SMEs and micro-enterprises are consistently made and that all SME tests in Impact Assessments are robust, including consistent consultation of SMEs as part of all Impact Assessments, promoting broad and inclusive participation by SMEs and micro-enterprises in consultations, clear reporting in the Impact Assessment on the outcome of consultations of SME and micro-enterprises, and ensuring that Impact Assessments and consultations are easy to read for SMEs and micro-enterprises, both in terms of lay-out, wording and languages.

13)    INVITES the Commission and Member States to explore the possibilities to support the development and use of digital tools making it easier to understand complex regulation and to comply with regulation once implemented."

[1]        Doc. 9079/15
[2]        Doc. 15506/15
[3]        The Council recalls the Precautionary Principle.
[4]        Such as the Regulatory Sandbox in the UK, Green Deals in the Netherlands and the Commission's intended Innovation Deals.
[5]        Such as the Right to Challenge and the use of sunset clauses.
[6]        Impact assessment toolbox 18 and 23.
[7]        Doc. 16000/14

On 27 May 2016, the Council adopted additional restrictive measures against the Democratic People's Republic of Korea (DPRK). These measures complement and reinforce the sanctions regime imposed by United Nations Security Council (UNSC) resolutions. 

In response to the nuclear test conducted by the DPRK on 6 January 2016 and the launch using ballistic missile technology of 7 February, the UNSC adopted resolution 2270 on 2 March 2016 imposing additional restrictive measures against the DPRK. On 5 and 31 March 2016 the Council transposed  this resolution into EU law. 

Considering that the actions of the DPRK constitute a grave threat to international peace and security in the region and beyond, the EU decided to further expand its restrictive measures targeting the DPRK's nuclear, weapons of mass destruction and ballistic missile programmes. These additional measures include: 

• in the trade sector: prohibition of the import of petroleum products and luxury goods from the DPRK, prohibition of the supply, sale or transfer to the DPRK of additional items, materials, equipment relating to dual-use goods and technology and ban on any public financial support for trade with the DPRK;
• in the financial sector: prohibition of transfers of funds to and from the DPRK, unless for certain predefined purposes and authorised in advance;
• in terms of investment: prohibition of all investment by the DPRK in the EU; prohibition of investment by EU nationals or entities in the mining, refining and chemical industries sectors as well as in any entities engaged in the DPRK's illegal programmes;
• in the transport sector: prohibition on any aircraft operated by DPRK carriers or originating from the DPRK from landing in, taking off or overflying EU territory; prohibition on any vessel owned, operated or crewed by the DPRK from entering EU ports.

EU restrictive measures against the DPRK were introduced on 22 December 2006. The existing EU measures implement all UNSC resolutions adopted after the DPRK's nuclear tests and launches using ballistic missile technology and already include additional autonomous measures. Prohibitions on the export and import of arms, goods and technology that could contribute to nuclear, weapons of mass destruction and ballistic missile programmes, and other restrictions in the financial, trade and transport sectors were already in force. 

On 5 March 2016, the Council transposed a first set of measures under UNSCR 2270 by adding 16 persons and 12 entities to the list of those subject to travel restrictions and asset freeze. On 19 May 2016 the Council brought the total number of persons subject to EU restrictive measures against the DPRK to 66 and the number of entities to 42.

The legal acts are published in the Official Journal of 28 May 2016. The decision was adopted by written procedure. 

The Council agreed on a general approach on a draft regulation aimed at ensuring the cross-border portability of online content services in the internal market.

The agreement enables the Council to start negotiations with the European Parliament, once the Parliament has set its negotiating position, under the ordinary legislative procedure.

The president of the Council and minister for economic affairs of the Netherlands, Henk Kamp, made the following comments: "This initiative will make life easier for European citizens when they travel, by allowing them to keep accessing online content they have legally acquired or subscribed to in their home member state when they are temporarily in another member state. This means that citizens who are in another member state for purposes such as holidays or business trips can enjoy for example music, films, games or sporting events just like at home".

Travelling with subscriptions to online content services

The increased use of portable devices such as tablets and smartphones facilitates access to the use of online content services regardless of the consumers' location.

There is a rapidly growing demand on the part of consumers for access to content and innovative online services not only in their home country but also when they are temporarily abroad. Therefore, barriers that hamper access and use of such online content services within the single market will be eliminated.

Current obstacles to cross-border portability of online content services stem from the fact that the rights for the transmission of content protected by copyright and/or related rights such as audiovisual works as well as rights for premium sporting events are often licensed on a territorial basis.

Under the general approach, the regulation would apply to online content services which are provided against payment of money. Free to air services, such as public broadcasters, would be able to benefit from the regulation provided that they verify the country of residence of their subscribers.

The Commission presented the original proposal in December 2015. It is among the first initiatives of the digital single market strategy put forward with the objective of creating an internal market for digital content and services.

On 25 May 2016 Lebanon enters its third year without a President. The sovereignty, stability, territorial integrity and independence of Lebanon are important for the European Union. Lebanon remains an example of freedom, diversity and tolerance for the region, but the prolonged political crisis can only further weaken the country and its institutions in facing its many challenges. Lebanon cannot afford to wait for the region to solve its problems before it addresses this issue.

The EU again urges Lebanese political forces and all stakeholders to put partisan and individual interests aside and find a viable compromise to elect a President swiftly. The EU supports the efforts deployed by the Lebanese government under difficult circumstances to ensure that issues of dissent do not hinder completely the functioning of Lebanese Institutions, and do not compromise the delivery of international assistance. In this context the EU commends the Lebanese Armed Forces' work for the safety and security of the country. The National Dialogue and other mediation efforts are laudable initiatives to ensure communication between political forces and prevent a deterioration of the political climate. The EU welcomes the holding of the Municipal elections and the Parliamentary by-elections for a vacant Parliamentary seat, and calls on all parties to create the conditions for the holding of Parliamentary elections.

The EU is fully aware of the additional challenges that the refugee crisis poses for the stability of Lebanon. The EU commends the Lebanese people for their efforts to host refugees fleeing the conflict in Syria, and stresses the importance of respect by all parties of the right to safe and voluntary return of refugees displaced from Syria. As demonstrated by the EU's pledge at the London Conference and its initial implementation, the EU and its Member States are committed to supporting Lebanon, its host institutions and public services in addressing the growing needs of all vulnerable host communities and refugees.  The EU welcomes Lebanon's Statement of Intent presented at the London Conference, and fully supports its implementation.

The EU reiterates its commitment to the partnership with Lebanon, and reaffirms the need to work together to respond to common challenges on the basis of our common values, including human rights, democracy, and respect for diversity.

Japanese Prime Minister Shinzo Abe, European Council President Donald Tusk, European Commission President Jean-Claude Juncker, French President François Hollande, German Chancellor Angela Merkel, Italian Prime Minister Matteo Renzi and UK Prime Minister David Cameron, made the following joint statement in the margins of the G7 Summit in Ise-Shima:

“We, the Leaders of Japan, the European Union, France, Germany, Italy and the United Kingdom, in the margins of the G7 Summit in Ise-Shima welcome the view shared by the leaders of Japan and the European Union on the occasion of their meeting on 3 May 2016 to instruct their respective negotiators to accelerate the negotiations on the Japan-EU Economic Partnership Agreement (EPA)/Free Trade Agreement (FTA) and reaffirm our strong commitment to reach agreement in principle as early as possible in 2016.

We commend the work of our negotiators over the last 3 years, and for the substantial progress already made. With our full backing, the negotiators are entrusted to make the efforts necessary in the coming months to move forward with the negotiations, paving the way for reaching agreement encompassing all key issues including all types of tariffs and non-tariff measures, in line with the timeline committed above in a constructive manner, based on mutual trust, toward a comprehensive, high-level and balanced agreement which further consolidates our solid trade and economic partnership.

Recognizing the strategic importance of the Japan-EU EPA/FTA, we remain committed to creating a free, fair and open international trade and economic system, which will promote stronger, sustainable and balanced growth and contribute to the creation of more jobs and economic opportunity in Japan and the European Union and to the increase of our international competitiveness.”

Representatives of the EU Member States, the Western Balkans and Turkey, the European Commission and the European Central Bank, as well as representatives of the central banks of the Western Balkans and Turkey[1] met for their annual economic policy dialogue[2]. Participants welcomed the submission of the 2016 Economic Reform Programmes (ERPs) of the Western Balkans and regretted that Turkey's ERP had been submitted with a significant delay. The programmes outline the medium-term macroeconomic and fiscal framework as well as structural reforms (affecting labour markets, transport, energy, education etc.) to enhance competitiveness and long-term growth. The programmes cover the period 2016-2018. 

Participants took note of the Conclusions of the General Affairs Council on 15 December 2015 in which the Council took note of the Commission's communication on the EU enlargement strategy and the reports, which have a strengthened focus on economic governance. The dialogue on economic governance with the Western Balkans and Turkey is meant to prepare them for their future participation in the EU economic policy coordination. The dialogue reflects to some extent the European Semester process at EU level. 

Participants recalled the commitment to set out a new set of targeted policy guidance to support efforts towards fulfilling the Copenhagen economic criteria. In this context, Participants agreed that the elements of the 2015 policy guidance which had not yet been fully implemented remained valid and needed be addressed by policymakers in the Western Balkans and Turkey. 

 [1] Montenegro, Serbia, the former Yugoslav Republic of Macedonia, Albania and Turkey are candidate countries for EU accession. 

[2] The conclusions of this dialogue are without prejudice to EU Member States' positions on the status of Kosovo.  

 

The Council of the European Union (ECOFIN): 

-       WELCOMES the Commission Communication "Towards a single EU VAT area - Time to decide" (VAT Action Plan) and TAKES NOTE of the Special Report of the Court of Auditors No. 24: "Tackling intra-Community VAT Fraud: More action needed", as well as of the findings and recommendations set out therein; 

-       RECALLS Council conclusions of 15 May 2012 "On the Future of VAT", where the Council has emphasised that the EU needs a simpler VAT system, which at the same time is more efficient, more robust, fraud-proof and tailored for single market and has pointed out the following principles and legal considerations, which should be taken into account in furtherance of any future action: cost-efficiency, proportionality, unanimity, data protection legislation, compliance with the subsidiarity principle and full respect for the respective competences of the Union and the Member States; 

-       AGREES that the EU VAT system needs to be modernised and improved with these general objectives in mind, while stressing the importance of keeping the EU's business environment competitive; 

-       ACKNOWLEDGES the objectives outlined in the VAT Action Plan, which provide a framework to achieve a Single EU VAT area, and 

-       ADOPTS the following conclusions: 

I.       ON URGENT MEASURES TO FIGHT VAT FRAUD AND TACKLE THE VAT GAP

The Council of the European Union: 

1.      RECALLS the utmost importance of robust legal rules which hamper VAT fraud and AGREES with the Commission and the Court of Auditors that improving administrative cooperation between tax authorities is of significant importance in the fight against VAT fraud, and hence UNDERTAKES to pursue discussion on means of enhancing the scope of administrative cooperation and stepping up efforts to exchange information between tax administrations; 

2.      CONFIRMS that there is a need for further co-operation in a spirit of good understanding among business and tax administrations, as well as between tax administrations of EU Member States; 

3.      UNDERLINES that further initiatives in this area should form an efficient addition to existing rules and instruments and also seek to guarantee high standards of data protection, and fully take into account the principles of sovereignty, subsidiarity and proportionality; 

4.      TAKES NOTE of the Commission's intention to table in 2017 a legislative proposal that will aim at improving the exchange, sharing and analysis of key information and foresee conducting of joint audits; 

5.      ACKNOWLEDGES that improvement of information exchange could result in a clear improvement of efficiency in the fight against VAT fraud, and CALLS upon the Commission to propose ways of addressing  legal obstacles and practical limitations that might exist in the EU and in the Member States that prevent from making a qualitative leap in this area in the EU; 

6.      HIGHLIGHTS that this work should promote co-operation and cover the full range of available means and methods and alignment of procedures, including, inter alia, VIES, Eurofisc, feedback procedures and customs procedure 42, where the challenges both to customs and tax authorities must also be addressed; 

7.      LOOKS FORWARD to the other measures referred to in the VAT Action Plan that the Commission will propose to the Council with the objective of improving cooperation between tax administration and customs authorities; 

8.      UNDERLINES that as discussed during an informal meeting of ECOFIN ministers in Amsterdam, automatic exchange of information is one of the ways forward in the fight against fraud; 

9.      CONFIRMS that risk assessment and analysis remains a major area for further improvement in the EU, and INVITES the Commission, after the results of the feasibility study on Transaction Network Analysis have been evaluated by Member States, to present relevant initiatives enabling the Member States, wishing to start this tool on a voluntary basis, to exercise such an option, and at the same time ASKS the Commission to consider the possibilities of an explicit legal basis; 

10.    RECOGNISES that some Member States are more heavily affected by VAT fraud than others and the need to find practical and short-term solutions rapidly, and TAKES NOTE of the position of the Commission regarding a possible temporary derogation for certain Member States to apply the reverse charge mechanism in a wider scope and that the implementation of such derogation would require legislative measures;

11.    CONFIRMS that such derogations should not disproportionally hamper the proper functioning of the internal market; 

12.    UNDERLINES, without prejudice to a definitive VAT system, that the information obtained from a temporary derogation could be useful to decide on the most efficient way of fighting VAT fraud, and LOOKS FORWARD to an in-depth analysis by the Commission on possibilities for a temporary derogation, to be presented at the upcoming June ECOFIN; 

13.    TAKES NOTE of the non-legislative measures whereby the Commission intends to tackle the VAT gap and STRESSES that the Council will examine these non-legislative measures on the basis of the principles of sovereignty, subsidiarity, and proportionality. 

II.      ON SHORT AND MEDIUM-TERM ACTIONS IN VAT AREA AND SMEs 

The Council of the European Union: 

14.    WELCOMES the call by the Commission to reduce VAT compliance burdens for business, particularly for SMEs, both within Member States and across borders, and TAKES NOTE of the Commission's intention to make legislative proposals in  2016 and 2017; 

15.    EMPHASISES that the ultimate objective remains that VAT compliance costs in the single market are brought closer to the levels of those in domestic trade, however, further simplification should not result in an increase of VAT fraud risks or disproportionate rise of the costs of tax administration; 

16.    HIGHLIGHTS the importance of reflecting upon the position of micro-SMEs in the VAT system, in order to promote growth, jobs and real economy in the EU, without causing distortions of competition; 

17.    In the context of the Digital Single Market Strategy, STRESSES the importance of finding an EU-level solution rapidly to eliminate the competitive disadvantage for EU suppliers and UNDERTAKES to review the scope and discuss the possibility of repealing the VAT exemption for final importation of small consignments of goods into the EU by non-EU suppliers, considering also the impact of possible changes on the customs administration; 

18.    RECOGNISES the need to simplify cross-border e-commerce, and the opportunity to extend the "One Stop Shop" for online sales of tangible goods to final consumers and CALLS FOR further analysis and technical work to be undertaken on a common EU-wide simplification measure, including a threshold; 

19.    NOTES that the debate will continue concerning a possible  introduction of legal means allowing for home country checks, including a single audit of cross-border businesses;

20.    In this context, LOOKS FORWARD to receiving the results of the ongoing Commission' study on VAT obstacles to cross-border e-commerce and the legislative proposals by the Commission; 

21.    STRESSES that improvements on the current system could be possible and necessary in the short term. 

III.    ON THE DEFINITIVE VAT SYSTEM (SINGLE EU VAT AREA) 

The Council of the European Union: 

22.    TAKES NOTE of the points made by the Commission in its VAT Action Plan as regards the way forward towards the definitive VAT system and of its intention to present a legislative proposal in 2017 for the definitive VAT system for cross-border trade, as a first step;

23.    NOTES, while working towards the definitive VAT system in the EU, the importance of fully respecting the principles of subsidiarity and proportionality and taking full account of how potential EU-level solutions would best fit with the aspects upon which Member States continue to exercise their competence; 

24.    REITERATES that the principle of “taxation in the Member State of origin of the supply of goods or services”, as envisaged in article 402 of Directive 2006/112/EC on the common system of value added tax, should be replaced by the principle of “taxation in the Member State of destination” for the definitive VAT system for B2B transactions, as stated in the Council conclusions of 15 May 2012; 

25.    WELCOMES the in-depth technical work conducted by the Commission so far, as well as the broadly based dialogue it initiated with Member States to examine in detail the different possible ways how to best implement the destination principle; 

26.    STRESSES nevertheless that the work has to continue to set ground for the political choice to be made with regard to the definitive VAT system; 

27.    TAKES NOTE that taxation with cross-border reverse charge in the Member State of destination could be analysed as an option to the proposed taxation of cross-border supplies for the definitive VAT system; 

28.    UNDERSCORES that the Council will continue to follow up the debate to reach an agreement on the political guidance to the Commission to conduct further analysis that would enable it to carry this work forward and enable the Council to properly evaluate the impact of possible technical solutions and adopt those that suit the common EU objectives best. 

IV.    ON VAT RATES 

The Council of the European Union: 

29.    TAKES NOTE of the directions of action proposed in the Commission Action Plan on VAT with regard to the VAT rate system and its intention to make a legislative proposal in 2017, proposing a reform to give more freedom to Member States in setting up rates and proposing two options; 

30.    RECALLS the conclusions of the European Council of 17-18 March 2016 which welcomed "the intention of the Commission to include proposals for increased flexibility for Member States with respect to reduced rates of VAT, which would provide the option to Member States of VAT zero rating‎ for sanitary products";

31.    WELCOMES the intention of the Commission to present a proposal for increased flexibility for Member States, so that they could benefit from the existing reduced and zero rates in other Member States, INVITES the Commission to include an impact assessment, and STRESSES that a sufficient level of harmonisation in the EU remains required and the adopted solution has to be carefully balanced to avoid distortion of competition, rise in business costs and negative impact on the functioning of the single market; 

32.    INVITES the Commission to present a legislative proposal which integrates provisions concerning VAT rates for e-publications in the context of Digital Single Market initiatives by the end of 2016 and include an impact assessment; 

33.    CALLS UPON the Commission, in line with the March 2016 European Council conclusions, to present to the Council a legislative proposal foreseeing an option to Member States of VAT reduced or zero rating for women's sanitary products at the earliest opportunity. 

On 25 May 2016, the EU agreed new rules on medical devices and in vitro diagnostic medical devices. 

The Netherlands presidency of the Council and representatives of the European Parliament reached a political agreement. It is still subject to the approval by the Council's Permanent Representatives Committee and of the Parliament's ENVI committee.

The agreed two draft regulations are expected to achieve a twofold aim: making sure that medical devices and in vitro diagnostic medical devices are safe while allowing patients to benefit of innovative health care solutions in a timely manner.

Medical devices and in vitro diagnostic medical devices cover a wide range of products, from sticking plasters to hip replacements, and from pregnancy tests to HIV tests. 

"This agreement matters to all citizens: sooner or later all of us enter into contact with medical devices to diagnose, prevent, treat or alleviate diseases. The deal reached will improve patients' health and it will help to enhance the quality of life of disabled persons. It will also ensure a level playing field for the 25 000 medical devices manufacturers in the EU, many of which are SMEs and which employ more than half a million persons", said Edith Schippers, Minister of Health of the Netherlands and President of the Council.

Strengthening the system 

The agreement reached seeks to ensure the safety of medical devices by two means: by strengthening the rules on placing devices on the market and tightening surveillance once they are available. 

The agreement will further tighten the rules for the independent bodies that are responsible for assessing medical devices before they can be placed on the market. The new rules will strengthen the surveillance of these so-called notified bodies by national authorities. They will also give these bodies the right and duty to carry out unannounced factory inspections. Notified bodies will have to ensure that they have available qualified personnel.

The draft regulations establish explicit provisions on manufacturers' responsibilities for the follow-up of the quality, performance and safety of devices placed on the market. This will allow manufacturers to act swiftly when concerns arise and help them to improve their devices continuously on the basis of actual data. Manufacturers and other economic operators will have clear responsibilities, for instance on liability, but also on registering complaints on devices. The draft regulations also improve the availability of clinical data on devices. The protection of patients participating in clinical investigations will also be strengthened.

 Strengthened rules for high risk devices

 Certain high risk devices, such as implants, may undergo an additional check by experts before they are placed on the market. Expert panels and laboratories will play a key role in supporting the legislative system, to provide expertise and guidance on clinical aspects to notified bodies, competent authorities and to manufacturers. 

The new EU rules also explicitly cover certain devices without a medical purpose but with similar characteristics as medical devices. This concerns for instance  fillers and coloured contact lenses for cosmetic purposes.

More transparency for patients and increased traceability

A central database will be set up to create an improved system for all relevant information. It will cover economic operators, notified bodies, market surveillance, vigilance, clinical investigations and certificates. In addition, it will provide patients, healthcare professionals and the public with comprehensive information on products available in the EU. This will enable them to make better informed decisions. Patients who are implanted with a device will be given key information on the product, including any precautions which might need to be taken.

Devices will have a unique identification number to provide for traceability throughout the supply chain to the end-user or patient.  

Next steps 

The Council's Permanent Representatives Committee will be invited to endorse the agreement probably mid-June 2016. Once the Parliament's ENVI committee has also confirmed that it can accept the compromise the Council will be invited to confirm the agreement. Following the revision of the texts by the lawyer-linguists the two regulations will have to be formally adopted by the Council and the Parliament. The new rules will apply three years after publication as regards medical devices and five years after publication as regards in vitro diagnostic medical devices. 

1.             The forty-fifth meeting of the EEA Council took place in Brussels on 25 May 2016 under the Presidency of Mr Bert Koenders, Minister of Foreign Affairs of the Netherlands, representing the Presidency of the Council of the European Union. The meeting was attended by Ms Aurelia Frick, Minister of Foreign Affairs of Liechtenstein, Ms Lilja Dögg Alfreðsdóttir, Minister for Foreign Affairs of Iceland, and Ms Elisabeth Aspaker, Minister of EEA and EU Affairs of Norway, as well as by Members of the Council of the European Union and representatives of the European Commission and the European External Action Service.

2.             The EEA Council noted that, within the framework of the Political Dialogue, the Ministers would discuss the migratory and refugee crisis, Russia and Ukraine, the EU Global Strategy on foreign and security policy, including cooperation in the Arctic. An orientation debate was held on the state of play of the Better Regulation agenda and its impact on the EEA.

3.             The EEA Council acknowledged the key role played by the EEA Agreement for more than 20 years in advancing economic relations and internal market integration between the EU and the EEA EFTA States. The EEA Council highlighted that the Agreement had been robust and capable of adapting to changes in EU treaties and EU enlargements. The EEA Council recognised that increased efforts towards enhancing competitiveness would be key for jobs and growth in Europe.

4.             The EEA Council emphasised the importance of a well-functioning Single Market as a driver in boosting economic growth and creating new jobs throughout Europe, and welcomed the steps already taken to implement the proposals contained in the strategies for a Digital Single Market and for upgrading the Single Market, both launched in 2015, with a view to exploiting in full its untapped growth and productivity potential. The EEA Council agreed that a holistic approach is required to tackle some of the main challenges facing the Single Market, and stressed the importance of close involvement of the EEA EFTA States in the further design and development of single market policies and initiatives.

5.             Noting the Progress Report of the EEA Joint Committee, the EEA Council expressed its appreciation for the work of the Joint Committee in ensuring the continued successful operation and good functioning of the EEA Agreement.

6.             The EEA Council emphasised the importance of solidarity among the countries of Europe to overcome social and economic challenges. In particular, the EEA Council expressed concern regarding the continued high level of youth unemployment in some EEA Member States.

7.             The EEA Council recognised the still existing need to alleviate social and economic disparities in the EEA, as well as the positive contribution of the EEA and Norway Financial Mechanism 2009-2014 and of their predecessors in reducing economic and social disparities throughout the EEA.

8.             The EEA Council welcomed the signature on 3 May 2016 of the Agreement on an EEA Financial Mechanism 2014-2021 and of the Agreement between Norway and the EU on a Norwegian Financial Mechanism for the 2014-2021 period.

9.             The EEA Council also welcomed the signature on 3 May 2016 of the protocols on trade in fish and fisheries products between Norway and the EU and Iceland and the EU and called for a swift conclusion of the necessary work.

10.         Emphasising the fact that greater knowledge of the EEA Agreement throughout the EEA is in the interest of all Contracting Parties, the EEA Council urged them to ensure that information on the EEA Agreement is made readily and easily available.

11.         The EEA Council noted that free movement of capital is a fundamental internal market freedom and an integral part of the EEA acquis and acknowledged that restrictions can be implemented only temporarily on the basis of the provisions of Article 43 of the EEA Agreement.

12.         The EEA Council welcomed the significant progress towards finalisation of the EEA Joint Committee Decisions of the first package of legal acts related to the EU Regulations on the European Supervisory Authorities in the area of financial services. It stressed the need to swiftly finalise the necessary procedures to allow for the incorporation into the EEA Agreement and the rapid entry into force of these acts in order to ensure effective and homogenous supervision throughout the EEA, as called for by the EU and EEA EFTA Ministers of Finance and Economy at their informal meeting of 14 October 2014. The EEA Council also highlighted the high importance of promptly incorporating and applying the other outstanding legislation in the field of financial services as soon as possible in order to ensure a level playing field throughout the EEA in this important sector.

13.         The EEA Council placed great importance on continued close cooperation between the EU and the EEA EFTA States in environment, energy and climate change polices, particularly in light of the 2030 Framework for Climate and Energy and the Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy. The close cooperation should also continue in particular in the areas of internal energy market, energy security, emissions trading, promotion of competitive, climate resilient, safe and sustainable low carbon energy, energy efficiency, renewable energy resources, carbon capture and storage (CCS) and carbon capture and utilisation (CCU), as well as other environmental issues such as waste, chemicals, water resource management and industrial pollution.

14.         The EEA Council welcomed the efforts and close cooperation of the EU, its Member States and the EEA EFTA States in the preparations of the 21st Conference of the Parties (COP21) of the United Nations Framework Convention on Climate Change (UNFCCC) in Paris in December 2015. The EEA Council highlighted that this cooperation had contributed to the adoption of an ambitious, dynamic, durable and legally binding global agreement. In order to hold the increase in the global average temperature well below 2ºC, and to pursue efforts to limit it to 1,5° C above pre-industrial levels, as well as to foster climate resilience and low greenhouse gas emissions development, parties aim to reach global peaking of greenhouse gas emissions as soon as possible and to undertake rapid reductions thereafter in accordance with best available science, so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century. The EEA Council underlined the need to maintain the momentum after COP21 and focus on implementation, at the international level and domestically, in particular in relation to the Intended Nationally Determined Contributions (INDCs) and the 2030 climate and energy framework. In this regard, the EEA Council welcomed the opening for signature of the Paris Agreement on 22 April 2016 in New York and underlined the need for the EU, its Member States and the EEA EFTA States to be able to ratify the Paris Agreement as soon as possible and on time so as to be Parties as of its entry into force.

15.         The EEA Council welcomed the ongoing efforts made to both reduce the number of EEA-relevant EU acts awaiting incorporation into the EEA Agreement and to accelerate the incorporation process. While commending all the steps undertaken in the course of the last years, the EEA Council noted that the number of acts awaiting incorporation was still too high. The EEA Council called for continued work in order to significantly and durably reduce the current backlog and thereby ensure legal certainty and homogeneity in the EEA. It urged all parties to engage constructively to find solutions to pending difficult issues.

16.         With regard to the Third Package for the Internal Energy Market, the EEA Council welcomed progress made in recent months with regard to EEA EFTA participation in the Agency for the Cooperation of Energy Regulators (ACER), and underlined the importance of swiftly finalising this work in order to establish a fully functional internal market for energy.

17.         The EEA Council welcomed the incorporation into the EEA Agreement of the public procurement legislative framework and progress made in recent months with regard to the 2009 regulatory framework for electronic communications (including the Regulation on the Body of European Regulators for Electronic Communications - BEREC), and the Regulation on Medicinal Products for Paediatric use.

18.         The EEA Council noted that progress was still needed on a number of important outstanding issues and looked forward to reaching a conclusion as soon as possible, in particular regarding the Third Postal Directive, the EU legal acts in the area of organic production as well as in the area of common rules and standards for ship inspection and survey organisations.

19.         The EEA Council noted that there was a number of Joint Committee Decisions, for which the six-month deadline provided for in the EEA Agreement with regard to constitutional clearance had been exceeded. It encouraged the EEA EFTA States to strengthen their efforts to resolve the pending cases as soon as possible and to avoid such delays in the future.

20.         The EEA Council acknowledged the significance of the negotiations on a Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the United States. The EEA Council welcomed the continuous exchange of information between the European Commission and the EEA EFTA States, initiated in the EEA Joint Committee in December 2014. Bearing in mind inter alia Protocol 12 to the EEA Agreement, the EEA Council encouraged a continuation of this exchange of information.

21.         The EEA Council acknowledged that the Contracting Parties, pursuant to Article 19 of the EEA Agreement, had undertaken to continue their efforts with a view to achieving the progressive liberalisation of agricultural trade. The EEA Council looked forward to the signing of the Agreements on the further liberalisation of agricultural trade and on the protection of geographical indications between the EU and Iceland, which were initialled on 17 September 2015, in the near future.

22.         The EEA Council took note of the lack of progress in the negotiations between the EU and Norway on the protection of geographical indications and noted the suspension of the talks for the time being. However, the EEA Council welcomed the progress made in the negotiations between the parties on further liberalisation of agricultural trade within the framework of Article 19 launched in February 2015 and encouraged the parties to actively continue their efforts for further progress in the negotiations.

23.         The EEA Council looked forward to the adoption of the Joint Committee Decision related to the agreement on the further liberalisation of trade in processed agricultural products within the framework of Article 2(2) and Article 6 of Protocol 3 to the EEA Agreement between Iceland and the EU, which was concluded on 17 September 2015, in the near future.

24.         The EEA Council encouraged the Contracting Parties to continue the dialogue on the review of the trade regime for processed agricultural products within the framework of Article 2(2) and Article 6 of Protocol 3 to the EEA Agreement in order to further promote trade in this area.

25.         Acknowledging the contribution made by EU programmes to building a more competitive, innovative and social Europe, the EEA Council welcomed the participation of the EEA EFTA States in EEA-relevant programmes to which they contribute financially.

26.         The EEA Council underlined the importance of continuing the practice of inviting officials from the EEA EFTA States to political dialogues held at the level of the relevant EU Council working parties.

27.         The EEA Council underlined the importance of inviting EEA EFTA Ministers to informal EU ministerial meetings and ministerial conferences relevant to EEA EFTA participation in the Internal Market, and expressed its appreciation to the current Dutch and incoming Slovak Presidencies for the continuation of this practice.

28.         The EEA Council recognised the positive contributions made by the EEA EFTA States to the decision-shaping process of EEA-relevant EU legislation and programmes through their participation in the relevant committees, expert groups and agencies, as well as through the submission of EEA EFTA Comments.

29.         The EEA Council noted the Resolutions of the EEA Joint Parliamentary Committee adopted at its meeting in Vaduz on 19-20 May 2016 on The Single Market Strategy for Goods and Services, and on The Collaborative Economy, and of the EEA Consultative Committee adopted at its meeting in Vaduz on 19-20 May 2016 on Labour mobility in the EEA and on Better Regulation to support businesses and protect workers in the EEA.

The Council: 

1.      CONFIRMS the importance of continuing and intensifying action to tackle tax fraud, tax evasion and aggressive tax planning at national, EU and global level, as requested by the European Council in May 2013 and recalled by Ministers at the informal ECOFIN on 22 April 2016; 

2.      RECALLS the importance of taking effective steps to fight tax evasion, tax fraud and tax avoidance as well as money laundering, in particular in times of budgetary constraints; 

3.      therefore WELCOMES the Commission Communication on an External Strategy for Effective Taxation and NOTES the Commission Recommendation on the implementation of measures against tax treaty abuse; 

4.      RECALLS that from the discussions during an informal meeting of ECOFIN ministers in Amsterdam support emerged for the establishment of an EU-list of non-cooperative jurisdictions and coordinated defensive measures, both to be defined by the Council;

Regarding the Communication on an External Strategy, the Council: 

5.      CALLS FOR a swift and comprehensive implementation of the internationally agreed standards on transparency and exchange of information developed by the OECD and ENCOURAGES all jurisdictions to commit to implement international standards as soon as possible and URGES jurisdictions that are not yet participants in the OECD's inclusive framework to join without delay; 

6.      AGREES on the establishment by the Council of an EU list of third country non-cooperative jurisdictions and to explore coordinated defensive measures at EU level without prejudice to Member State competence; 

7.      STRESSES the need to work closely and in parallel with the OECD to draw the international criteria in this area and to take into account the work of the Global Forum when developing the EU list of non-cooperative jurisdictions; 

8.      DECIDES that the criteria on transparency for establishing a list of non-cooperative jurisdictions have to be compliant with internationally agreed standards on transparency and exchange of information for tax purposes, in particular standards developed by the OECD, both on exchange of information on request and automatic exchange of information (Common Reporting Standard); 

9.      INVITES the Code of Conduct Group to consider  an additional criterion for listing non-cooperative jurisdictions based on the non-existence of harmful tax regimes as defined by the criteria of the Code of Conduct on Business Taxation, and possible additional criteria, which could be inspired in particular by the OECD BEPS actions; 

10.    INVITES the Code of Conduct Group to start work on an EU list of non-cooperative jurisdictions by September 2016, and to determine, on the basis of a first screening by the Commission, third Countries with which dialogues should start, with a view to establishing an EU list of non-cooperative jurisdictions and exploring defensive measures at EU level to be endorsed by the Council in 2017. Those defensive measures could be considered to be implemented in the tax as well as in the non-tax area;

11.    WELCOMES the pilot project for the automatic exchange of information on ultimate beneficial owners endorsed by all Member States with the aim of  developing a common standard;

12.    INVITES the Commission to consider legislative initiatives on Mandatory Disclosure Rules inspired by Action 12 of the OECD BEPS project with a view to introducing more effective disincentives for intermediaries who assist in tax evasion or avoidance schemes; 

13.    SUPPORTS the need to update the principles of tax good governance to be used as the new standard provision in future negotiations with third countries and INVITES the Code of Conduct Group to examine key elements which should be contained in a clause to be inserted in agreements between the EU and those countries; 

14.    CONCURS with the importance of tax good governance for developing countries to increase their domestic revenue mobilisation and UNDERLINES the importance of assisting them in meeting tax good governance; 

15.    STRESSES the importance of the Addis Tax Initiative (ATI), with its core commitment to doubling or substantially increasing support for technical cooperation on taxation and domestic resource mobilisation, already signed up to by twelve Member States, and CALLS FOR all remaining Member States to join the ATI; 

16.    IS READY to examine the proposal to include EU's updated tax good governance standards into the EU Financial Regulation in relation to third countries once a new proposal has been put forward by the Commission; 

Regarding the Recommendation on the implementation of measures against tax treaty abuse, the Council: 

17.    NOTES the recommendation from the Commission to ensure that the implementation of OECD BEPS recommendations on Actions 6 and 7 is compliant with EU law; 

18.    REITERATES the importance of taking concrete and coherent action against double non-taxation through tax evasion or avoidance via the operation of double tax conventions, in line with the competence of Member States in negotiating double tax conventions bilaterally and the principle of subsidiarity; 

19.    WELCOMES the proposed provisions with regard to a principal purpose test and permanent establishments to be included in bilateral tax treaties agreed by a Member State, while ACKNOWLEDGING that bilateral tax treaties remain the competence of the Member States and that other measures elaborated in the context of OECD BEPS Action 6 may be helpful, such as limitation on benefits (lob) clauses.  

Place:          Justus Lipsius building, Brussels
Chair(s):    Henk Kamp, Minister for Economic Affairs of the Netherlands
                    Sander Dekker, State Secretary of Education, Culture and Science of the Netherlands

All times are approximate and subject to change

Thursday 26 May - Internal Market - Industry - Space Policy

+/- 08.20
Doorstep by Henk Kamp

+/- 12.00
Working lunch debate on the digital single market strategy

+/- 14.00
Beginning of the Competitiveness Council meeting

Adoption of the agenda
Adoption of A Items (public session)

+/- 14.10
Digital single market strategy: mainstreaming competitiveness

Any other business (AOB):
Quantum technology - High performance computing

+/- 14.30
Draft regulation on cross border portability of online content (public session)

+/- 14.50
AOB: agenda for single market implementation

+/- 15.00
Competitiveness check-up

+/- 15.55
Better regulation to strengthen competitiveness

+/- 17.20
AOB: work programme of incoming presidency - Friends of Industry

+/- 17.30
AOB: Product safety and market surveillance package (public session)

+/- 17.45
Review of the posting of workers directive (public session)
(Break)

+/- 19.00
Uptake of space data

+/- 20.15
AOB: work programme of incoming presidency

+/- 20.30
Joint press conference of the Telecommunications and Competitiveness Councils (life streaming)

Friday 27 May - Research & Innovation

(ttbc)
Doorstep by Sander Dekker

+/- 09.30
Beginning of the Competitiveness Council meeting

+/- 09.40
FP7: final evaluation report and future outlook (public session)

+/- 10.00
Research and innovation friendly regulation (public session)

+/- 10.20
Transition towards an Open Science system (public session)

+/- 12.15
Any other business:
2016 ESFRI roadmap (public session)
European Innovation Council (public session)
Work programme of incoming presidency

+/- 13.00
Press conference (life streaming)

+/- 14.00
Working lunch debate on the European Research Area

Good evening and welcome to this press conference. 

The main topic of today's Eurogroup was of course Greece, so I will concentrate on that. We've reached a full staff-level agreement; well actually, the institutions and Greece had already reached the full staff-level agreement and that was welcomed and agreed and adhered to by the Eurogroup today. So on the package of all these major reforms that Greece had committed to last summer - we have now a full agreement, a lot of legislative work has been done by the Greek government and the institutions will do a final check on that to look at the last legislative work and to see whether that's all in agreement. Part of that is of course the contingency mechanism that makes sure that Greece stays on the fiscal path. 

On that basis and of the full implementation of those prior actions and the completion of the national procedures, the ESM will be able to endorse the supplementary MOU and then approve the disbursement of the 2nd tranche of this programme. The figure that we have outlined for that is €10.3 billion, to be disbursed in several disbursements but perhaps I'll leave it to Klaus to outline how that works both in substance and in procedure. So this is very good news, already this part of the agreement of today is very good news because it shows that the programme is fully back on track and that Greece has done a lot and is delivering a lot and we are making good progress there. 

Of course this should lead to a full and positive conclusion of the first review, and as you remember, on that basis we've promised to look at debt and discuss debt sustainability. And we did. We prepared that in a couple of Eurogroups behind us already when we said we would discuss it, when we said we had agreed on the method to look at gross financing needs on an annual basis to take as a standard the maximum of 15% of GDP and in the future, once the debt has gone down, that can go to 20%. So on the methodology we already have agreement. We also already agreed in the previous Eurogroup to take it step by step, so we have designed and agreed today a number of measures that can be taken on in the short run. We have a number of measures already for the medium term, if and when needed, and we have designed an additional mechanism for the long term. Let me give you little more information on that. 

The short term is basically a debt management so we've asked the ESM management to look at the measures, which have to do with repayment profiles, which have to do with reducing interest rate risks and which also outline a waiver of the step-up interest rate margin related to the debt buy-back tranche which was in the second Greek programme. So along those lines we've asked the ESM management to see what is possible and to take decisions on that in the short run and to take that on. 

It's difficult now and of course Klaus now probably will say more about what in economic terms the impact of that will be, but that is yet to be developed further by the ESM management. 

For the medium term -- this is a second term of measures -- will come into play upon the full implementation of the programme, so this is mid-2018, and the programme runs until July 2018 to be precise. If all is implemented and the programme has come to a successful end, we intend to do more along the following lines to abolish the step-up interest rate margin to the debt buy-back tranche of the 2nd Greek programme as of 2018 and the following years. It is the same measure that was also in the short-term package, but then it was only for 2017 so we will continue that measure for the longer term. 

A second element here is the use of the SMP profits and the restoration. If you remember, this was also the part of the second programme where we agreed to return the SMP profits and the profits from ANFA holdings to Greece. When the programme got into trouble in 2014, that stopped, the transfer of these profits. Some are still in the segregated account at the ESM in Luxembourg, that's the 2014 June tranche, so that will be made available. And as of budget year 2017, we will restart this transfer of ANFA and SMP profits to Greece. 

A third element in the medium term package: liability management, where we will consider early partial repayment of existing official loans to Greece. Utilizing unused resources within the ESM programme. To be a little more precise, you remember that part of this programme last summer: we reserved €25 billion for the recapitalization of banks; a lot less was needed -- roughly €5 billion -- so there's €20 billion so far unused. Part of that we will set aside for possible future problems in banks, but the larger part of that could be made available and used to swap existing official loans to Greece in order to reduce the interest rate costs or extend maturities. 

A final element in the medium term package is targeted EFSF re-profiling: that could be extension of weighted average maturities re-profiling of EFSF amortization, as well as capping and deferral of the interest payments. And here we will make sure that we don't incur any additional costs for former programme countries or to the EFSF. 

Then finally for the long term we've agreed to put in place a mechanism, which if needed and activated by the Eurogroup could provide additional debt measures to meet the gross financing benchmarks if it were to be a problem in the future. Of course, as you know, the whole loan package has a long maturity period so we also need to consider the longer period ahead. All of this of course under the agreement that Greece complies with the requirements of our fiscal frameworks. 

Now having said that, the key issue that will certainly interest you is whether the IMF is coming on board and tonight I am very glad to be able to say that the IMF has expressed its intention to recommend to the Fund's board to approve the financial arrangement before the end of the year. So the IMF will go to the board on the basis of this agreement to be part again of the support programme for Greece. Of course this requires a number of steps still to be taken. I will mention just two -- one is of course that before the IMF goes to the board we have a new DSA, to assess where we are, take into account all that is in this agreement and the IMF will of course assess the possible debt relief measures that we, the Eurogroup members, agreed tonight. So those are two key issues that IMF will have to assess before taking that board decision. 

The possible debt relief -- mainly talking about the medium-term package -- will be delivered at the end of the programme, so we are talking mid-2018. The scope will be determined by the Eurogroup on the basis of a revised DSA which will be designed in cooperation with European institutions, also taking into account the European fiscal policy framework -- and this is an important point brought by a number of ministers and also by Klaus -- that of course even after the programme, Greece will, as all Eurogroup members, remain under supervision for its fiscal policies by the Commission. So that is an important element also to take into consideration when we look at the future. 

On that basis we look forward to not just the successful completion of the first review, but also the intention of the IMF management to go to the board. I think this is an important moment in the long Greek programme -- an important moment for all of us since last summer when we had a major crisis of confidence between us -- that confidence has begun to recover. I think that this helped us very much in this Eurogroup and in the last Eurogroups, starting to talk about where we are in the programmes, talk about what is further needed to support Greece, also looking at its debt. And I want to extend my thanks to also to the Greek finance minister and his staff; they have been working very constructively, very seriously, with us, with the institutions, to get us where we are now and I think that is a new phase that I welcome very much. 

Thank you. 

The Eurogroup welcomes that a full staff-level agreement has been reached between Greece and the institutions. Also, the Eurogroup notes with satisfaction that the Greek authorities and the European institutions have reached an agreement on the contingency fiscal mechanism, which is in line with the Eurogroup statement adopted on 9 May in particular as regard the possible adoption of permanent structural measures, including revenue measures, to be agreed with the institutions. It therefore provides further reassurances that Greece will meet the primary surplus targets of the ESM programme (3.5% of GDP in the medium-term), without prejudice to the obligations of Greece under the SGP and the Fiscal Compact. 

The Eurogroup also welcomes the adoption by the Greek parliament of most of the agreed prior actions for the first review, notably the adoption of legislation to deliver fiscal parametric measures amounting to 3% of GDP that should allow to meet the fiscal targets in 2018, to open up the market for the sale of loans and to establish the agreed Greek Privatisation and Investment Fund that should operate in full independence. The Eurogroup mandates the EWG to verify in the next few days the full implementation of the outstanding prior actions on the basis of an assessment by the institutions, in particular the corrections to the legislation on the opening up of the market for the sale of loans, and on the pension reform, as well as the completion of all prior actions related to the government pending actions in the field of privatization. 

Following the full implementation of all prior actions and subject to the completion of national procedures, the ESM governing bodies are expected to endorse the supplemental MoU and approve the disbursement of the second tranche of the ESM programme. The second tranche under the ESM programme amounting to EUR 10.3 bn will be disbursed to Greece in several disbursements, starting with a first disbursement in June (EUR 7.5 bn) to cover debt servicing needs and to allow a clearance of an initial part of arrears as a means to support the real economy. The subsequent disbursements to be used for arrears clearance and further debt servicing needs will be made after the summer. The disbursements for arrears clearance will be subject to a positive reporting by the European Institutions on the clearance of net arrears. The additional disbursement for debt servicing needs will be subject to milestones related to privatization, including the new Privatization and Investment Fund, bank governance, revenue agency and energy sector to be assessed by the European institutions and verified by the EWG and the ESM Board of Directors. 

In line with the 9 May Eurogroup statement, and in view of the forthcoming full implementation of all the prior actions by Greece and completion of the first review, the Eurogroup considered today the sustainability of Greek public debt. 

The Eurogroup agrees to assess debt sustainability with reference to the following benchmark for gross financing needs (GFN): under the baseline scenario, GFN should remain below 15% of GDP during the post programme period for the medium term, and below 20% of GDP thereafter. 

The Eurogroup recalls the medium-term primary surplus target of 3.5% of GDP as of 2018 and underlines the importance of a fiscal trajectory consistent with the fiscal commitments under the EU framework. 

The Eurogroup recalls the following general guiding principles agreed on 9 May for possible additional debt measures: (i) facilitating market access in order to replace over time public financed debt with privately financed debt; (ii) smoothening the repayment profile; (iii) incentivising the country's adjustment process even after the programme ends; and (iv) flexibility to accommodate uncertain GDP growth and interest rate developments in the future. On 9 May the Eurogroup also reconfirmed that nominal haircuts are excluded, and that all measures taken will be in line with existing EU law and the ESM and EFSF legal frameworks. 

Guided by these principles and on the basis of technical work carried out by the EWG, the Eurogroup agreed today on a package of debt measures which will be phased in progressively, as necessary to meet the agreed benchmark on gross financing needs and will be subject to the pre-defined conditionality of the ESM programme. 

For the short-term, the Eurogroup agrees on a first set of measures which will be implemented after the closure of the first review up to the end of the programme and which includes: 

• Smoothening the EFSF repayment profile under the current weighted average maturity
• Use EFSF/ESM diversified funding strategy to reduce interest rate risk without incurring any additional costs for former programme countries
• Waiver of the step-up interest rate margin related to the debt buy-back tranche of the 2nd Greek programme for the year 2017

The Eurogroup asks the EFSF and ESM management to take these measures forward within their mandate, on the basis of preparatory work by the EWG, and where needed to prepare formal decision making by the relevant EFSF and ESM decision-making bodies. The decision on the smoothening of the EFSF repayment profile and the reduction of interest rate risks should be taken as a matter of priority. 

For the medium term, the Eurogroup expects to implement a possible second set of measures following the successful implementation of the ESM programme. These measures will be implemented if an update of the debt sustainability analysis produced by the institutions at the end of the programme shows they are needed to meet the agreed GFN benchmark, subject to a positive assessment from the institutions and the Eurogroup on programme implementation. 

• Abolish the step-up interest rate margin related to the debt buy-back tranche of the 2nd Greek programme as of 2018
• Use of 2014 SMP profits from the ESM segregated account and the restoration of the transfer of ANFA and SMP profits to Greece (as of budget year 2017) to the ESM segregated account as an ESM internal buffer to reduce future gross financing needs.  
• Liability management - early partial repayment of existing official loans to Greece by utilizing unused resources within the ESM programme to reduce interest rate costs and to extend maturities. Due account will be taken of exceptionally high burden of some Member States.
• If necessary, some targeted EFSF reprofiling (e.g. extension of the weighted average maturities, re-profiling of the EFSF amortization as well as capping and deferral of interest payments) to the extent needed to keep GFN under the agreed benchmark in order to give comfort to the IMF and without incurring any additional costs for former programme countries or to the EFSF.

For the long-term, the Eurogroup is confident that the implementation of this agreement on the main features for debt measures, together with a successful implementation of the Greek ESM programme and the fulfilment of the primary surplus targets as mentioned above, will bring Greece's public debt back on a sustainable path over the medium to long run and will facilitate a gradual return to market financing. At the same time, the Eurogroup agrees on a contingency mechanism on debt which would be activated after the ESM programme to ensure debt sustainability in the long run in case a more adverse scenario were to materialize. The Eurogroup would consider the activation of the mechanism provided additional debt measures are needed to meet the GFN benchmark defined above and would be subject to a decision by the Eurogroup confirming that Greece complies with the requirements under the SGP. Such mechanism could entail measures such as a further EFSF reprofiling and capping and deferral of interest payments. Also, the Eurogroup commits to long-term technical assistance to boost Greek growth. 

The Eurogroup recognises that over the exceptionally long time horizon of assessing debt sustainability there can be no forecasts, only assumptions, given the sizable degree of uncertainty over macroeconomic developments. 

Against the background of the forthcoming successful completion of the first review and the agreement on debt relief, the Eurogroup welcomes the intention of the IMF management to recommend to the Fund's Executive Board to approve a financial arrangement before the end of 2016 that will support the implementation of the agreed fiscal and structural reforms. It is recognised that, consistent with IMF policies, approval of this arrangement will also be based on a new DSA and the assessment of possible debt relief measures mentioned above. The possible debt relief will be delivered at the end of the programme in mid-2018 and the scope will be determined by the Eurogroup on the basis of a revised DSA in cooperation with the European Institutions for purposes of taking into account the European policy framework, subject to full implementation of the programme. 

The Eurogroup stands ready, in line with usual practice, to support the completion of future reviews provided that the policy package considered today, including the contingency mechanism, is implemented as planned.  The Eurogroup confirms that programme implementation, as well as policy conditionality and targets, will be reviewed regularly based on input from the institutions.

It is my pleasure to extend my wholehearted congratulations to you on your election as Federal President of the Republic of Austria. On behalf of the European Council and personally, I wish you every success in your endeavours.

I trust that under your term, Austria will benefit from the political stability and social cohesion that are necessary to respond to the challenges lying ahead. Maintaining Austria's productive contribution to supporting EU efforts has been, and will remain, essential in seeking common European solutions.

As part of the EU institutions' open day, the headquarters of the European Council and the Council of the European Union, the two institutions representing the member states of the EU, is opening its doors from 10.00 to 18.00 on Saturday 28 May, offering guided tours, activities and information stands.

Guided tours of the building

Guided by members of staff, visitors will be able to walk in the footsteps of the presidents and prime ministers of the 28 member states by following a route through the Council building from their arrival at the VIP entrance to the meeting rooms. Tours are organised from 10.00 to 17.00 in French, Dutch, German and English.

Member states' stand

The 28 member states will be represented at a joint stand, where visitors can learn how each country participates in the Union's work, discover their cultures and landscapes, and even taste some traditional dishes. Some member states, such as Cyprus, Slovenia and Hungary, will also put on traditional dance and/or music sessions. For the full list, see the open day website (link at the bottom of the page).

Central archives/Agreements office

The staff of the Council's central archives will tell visitors how and where the treaties and other major European agreements were signed. Visitors will also have the chance to see the originals or facsimiles of some of these historic documents, such as the original of the Convention between the African, Caribbean and Pacific States and the European Economic Community, signed in 1975, or a certified copy of the Treaty establishing the European Economic Community, signed in Rome in 1957.

Council online: visitors will be encouraged to take part in interactive games, discover surprising facts about Europe, take photos and share their impressions about the Council with their friends on social media.

Finally, the Council will house information stands of other EU institutions and bodies such as the European Central Bank (ECB), the European Investment Bank (EIB) and Frontex. EUNAVFOR MED operation SOPHIA, which operates against human smuggling and trafficking networks in the Mediterranean, will also be present.

Practical information

The open day will take place in the Justus Lipsius building, 175 rue de la Loi/Wetstraat, Brussels.

Due to the alert level currently in place in Belgium, additional security checks will be set up around the institutions. To facilitate these checks, visitors are encouraged not to bring luggage or other bulky objects.

Visitors are also encouraged to use public transport. A small train will circulate all day between the institutions in the European quarter.

Press contact and access

Media wishing to access the Justus Lipsius building on open day are asked to contact the press office if they have any questions and to obtain easy access.

1.           WELCOMES the publication of the Commission's country reports analysing the economic policies for each of the Member States, including the in-depth reviews (IDRs) in the context of the Macroeconomic Imbalances Procedure (MIP), as well as the accompanying Communication summarising the main results of the IDRs. 

I - IN-DEPTH REVIEWS 

2.           CONSIDERS that the IDRs are well structured as a key part within the country reports and NOTES the importance of presenting a thorough analysis of the imbalances in each of the Member States under review as the basis for multilateral surveillance, enhanced domestic ownership of reforms and effective policy adjustment. RECOGNISES that the analysis covers possible spillover effects to other countries and the euro area where relevant, differentiates between the adjustments driven by cyclical factors and those resulting from structural changes, and takes country-specific circumstances into account. Relevant analytical tools are also applied in view of the specific challenges of each economy and complemented by qualitative analysis where needed. 

3.           WELCOMES the Commission's effort to improve the transparency of the MIP, including streamlining and stabilisation of the categories of macroeconomic imbalances, the publication of a compendium bringing together relevant information on the implementation of the MIP, and the inclusion of new summary tables in the IDRs (MIP assessment matrices). NOTES Commission's plans with regard to specific monitoring of recommendations by the Council to all Member States concerned by imbalances and excessive imbalances, to ensure enhanced surveillance of the policy response to the imbalances identified. INVITES the Commission to outline a proposal for the concrete timing and content of this monitoring, including plans to differentiate with respect to the severity of imbalances, as well as the articulation with other surveillance procedures, notably post programme surveillance for countries concerned to avoid duplication and in line with established practice. EMPHASISES the importance of efficiency, transparency and predictability in assessing macroeconomic imbalances in the MIP. In light of this, UNDERLINES the importance of presenting both the country analysis and the conclusions on the assessment of imbalances together in line with the European Semester Roadmap.  

4.           AGREES that 13 of the examined Member States (Bulgaria, Germany, Ireland, Spain, France, Croatia, Italy, Cyprus, the Netherlands, Portugal, Slovenia, Finland and Sweden) are experiencing macroeconomic imbalances of various nature and magnitude. 

5.           AGREES with the view of the Commission that excessive imbalances exist in 6 Member States (Bulgaria, France, Croatia, Italy, Cyprus, and Portugal). The Council will carefully assess the Commission's further review for Croatia and Portugal presented in late May, which should take into account the policy measures outlined in their National Reform Programmes to assess whether further steps are needed. UNDERLINES that the MIP procedure should be used to its full potential, with the corrective arm applied where appropriate.   

 6.           AGREES that 6 of the examined Member States (Belgium, Estonia, Hungary, Austria, Romania and the UK) do not experience macroeconomic imbalances in the sense of the MIP. 

7.           UNDERLINES the continued need for policy action and strong commitment to structural reforms in all Member States, in particular when they face macroeconomic imbalances affecting the smooth functioning of EMU. Imbalances should be addressed in a durable manner focusing on key challenges, reducing risks, facilitating the rebalancing of the EU economies and creating conditions for sustainable growth and jobs. 

8.           RECOGNISES the continued progress achieved by Member States in correcting their external and internal imbalances, thus contributing to the rebalancing in the EU and within the euro area. However, UNDERLINES that there are still sizeable risks in certain Member States. While current account deficitis of the pre-crisis period have been considerably reduced or have moved to surplus, large stocks of external liabilities remain a vulnerability in some net debtor countries. ACKNOWLEDGES that cost competitiveness has generally improved in countries that exhibited large external deficits, with more limited evidence pointing to improvements in non-cost competitiveness. At the same time, elevated current account surpluses in some Member States with relatively low deleveraging needs persist and could under some circumstances indicate large savings and investment imbalances deserving progress on policy actions. 

9.           UNDERLINES that high levels of private and government debt remain an important challenge in a number of Member States in the context of low inflation and growth rates. Despite notable progress, further structural reforms are needed to enhance the growth potential and to tackle high unemployment, in particular among the youth and long-term unemployed. 

II - IMPLEMENTATION OF COUNTRY SPECIFIC RECOMMENDATIONS (CSRs)

10.         WELCOMES progress made in addressing the 2015 CSRs. The streamlined set of 2015 CSRs allowed for greater focus on tackling pressing challenges and persistent macroeconomic imbalances. TAKES NOTE that reform implementation has been uneven across policy areas and countries and that in only a few cases has substantial progress been made in addressing the CSRs. STRESSES that reform implementation needs to be stepped up to address the policy challenges outlined below and RECALLS the importance of a timely assessment of the implementation of CSRs in the Council prior to the proposal of new CSRs, in order to draw conclusions, increase national awareness and implement reforms effectively in each country. 

11.         STRESSES that further structural reforms to services, product and labour markets, alongside responsible, sound fiscal policies are needed to strengthen and sustain the economic recovery, correct harmful imbalances, achieve fiscal sustainability, improve the conditions for investment, and reinforce the single market, unleashing the growth potential of Member States' economies.     

12.         RECOGNISES the progress made by Member States in implementing CSRs in the areas of improving the business environment and in fighting against tax avoidance and improving its administration. Member states concerned should continue their efforts.  STRESSES that more progress could be achieved in generating a business and employment friendly regulatory environment, increasing female labour force participation, cutting red tape, strengthening both administrative efficiency and regulatory quality, and reducing the number of restrictions in the service sector, particularly by making it significantly easier for service providers to operate across borders. Progress in addressing existing gaps and weaknesses in some national fiscal frameworks has been made but are still limited in some Member States, and efforts should focus on ensuring their effective functioning to support the conduct of responsible fiscal policies. National fiscal frameworks should be brought in line with EU requirements. 

13.         AGREES that there is an urgent need to improve investment conditions in order to attract increased private investment in the real economy and ensure high quality public investment and infrastructures. Reform progress has been slow in tackling problems regarding sector specific regulation and other impediments to investment and in reforming public administration, judicial systems, insolvency frameworks and the business environment, including access to finance. Despite some progress, barriers to investment persist in some key sectors in many Member States. This is particularly the case for services, network industries and construction. 

14.         WELCOMES progress in reforming labour markets, but notes that significant challenges and implementation gaps remain. There remains potential to broaden tax bases and reduce the tax burden on labour. The successful integration of migrants and refugees in some Member States requires particular attention. While progress has been made in bringing back to the labour market the unemployed, further structural reforms to support employment and active labour market policies are needed.