European Council

The Maltese Presidency and European Parliament representatives reached a provisional agreement on extending the EU's funding to the European Financial Reporting Advisory Group (EFRAG).

Nearly €14 million will be allocated for the period 2017 to 2020 to ensure the operational continuity of the EFRAG. The EU's contribution to EFRAG's budget accounts for around 60%.

Christian Cardona, Minister for the Economy, Investment and Small Business of Malta, said: "Adequate funding will allow the EFRAG to carry out its mission effectively. EFRAG is now well equipped to continue advising the European Commission on international financial reporting standards in the interest of the European project. Independence and transparency are essential for strengthening the single market of financial services and capital". 

EFRAG's mission is to develop and promote European views in the field of financial reporting. It also tries to ensure that these views are duly taken into account within the International Accounting Standards Board, which is the independent body responsible for developing International Financial Reporting Standards (IFRS). 

In 2009, the EU launched a programme to support activities in the field of financial services, financial reporting and auditing. The beneficiaries of the programme are the IFRS Foundation, the EFRAG and the Public Interest Oversight Board (PIOB). 

The programme was extended under regulation 258/14 for the period 2014 to 2020 for the IFRS Foundation and the PIOB only. 

Concerning EFRAG, the Council and the Parliament decided to wait until a number of reforms in the EFRAG governance were completed. The governance reform of EFRAG to strengthen the EU's contribution to the development of international accounting standards was implemented on 31 October 2014.

Today's provisional agreement has still to be confirmed by the Council and the European Parliament in the coming weeks. Once confirmed, the total allocation from the EU budget to EFRAG will amount to €23 million for the period 2014 to 2020, which matches the Commission initial estimate.

The fifth meeting of the Accession Conference with Serbia at ministerial level was held today in Brussels to open negotiations on chapter 20 - Enterprise and industrial policy, and to open and provisionally close chapter 26 - Education and culture. 

The European Union delegation was led by Mr Louis Grech, Deputy Prime Minister and Minister for European Affairs and Implementation of the Electoral Manifesto of the Republic of Malta, on behalf of the Maltese Presidency of the Council of the European Union. The European Commission was represented by Mr Johannes Hahn, Commissioner for European Neighbourhood Policy and Enlargement Negotiations. The Serbian delegation was led by Ms Jadranka Joksimović, Minister without portfolio responsible for European integration. 

Following today's Conference, Serbia will have opened 8 chapters out of a total of 35 negotiation chapters of which 2 chapters have already been provisionally closed. Further Accession Conferences will be planned, as appropriate, in order to take the process forward. The accession negotiations were launched in January 2014. 

Chapters concerned 

Regarding the chapters on the agenda, the Union has closely examined Serbia's present state of preparations. 

Chapter 20 - Enterprise and industrial policy 

On the understanding that Serbia has to continue to make progress in the alignment with and implementation of the acquis in Chapter 20 - Enterprise and industrial policy, the EU noted that there is one benchmark that needs to be met for provisional closure of this chapter. The benchmark is as follows: 

• Serbia puts in place and starts to implement a comprehensive industrial strategy, supported by a system of evaluation indicators and benchmarks as suggested by EU policies relevant to industry.

Chapter 26 - Education and culture 

Regarding negotiations on chapter 26 - Education and culture, the EU considered that, exceptionally, benchmarks for the provisional closure of this chapter were not required, given the general good level of Serbia's state of preparedness in the area of Education and culture, and the limited scope and particular nature of acquis obligations in this chapter. The EU therefore noted that, at this stage, this chapter does not require further negotiations.

For both chapters on the agenda, monitoring of progress in the alignment with and implementation of the acquis will continue throughout the negotiations. The EU underlined that it would devote particular attention to monitoring all specific issues mentioned in its common positions. The EU will, if necessary, return to these chapters at an appropriate moment.

On 27 February 2017, the Council adopted a regulation on visa liberalisation for Georgians travelling to the EU for a period of stay of 90 days in any 180-day period.

"This agreement will bring the people of Georgia and the EU closer together and will strengthen tourism and business ties. It follows the completion of the necessary reforms by Georgia, addressing document security, border management, migration and asylum. In addition, the recent adaptation of the suspension mechanism has made this agreement possible." 

Carmelo Abela, Maltese Minister for Home Affairs and National Security

The Council and the European Parliament now need to sign the adopted regulation. The text will then be published in the EU Official Journal and will enter into force 20 days later, at the same time as the new visa waiver suspension mechanism.

The regulation formally amends regulation 539/2001, moving Georgia from Annex I (countries whose nationals need a visa to enter the Schengen area) to Annex II (visa free countries). Georgian citizens with a biometric passport travelling to the EU for up to 90 days for business, tourist or family purposes will no longer need a visa.

These measures will not apply to Ireland and the United Kingdom, in accordance with the protocols annexed to the EU treaties. The visa regime of these member states remains subject to their national legislation.

On 27 February 2017, the Council adopted a regulation to revise the suspension mechanism which can be applied to all existing visa liberalisation agreements.

"Visa liberalisation brings great advantages to the EU and third countries. At the same time, the EU must be able to respond effectively in cases where the rules are not being respected. The revision of the suspension mechanism adopted today makes it easier to tackle abuse of the system."

 Carmelo Abela,  Maltese Minister for Home Affairs and National Security

The objective of the revised regulation is to strengthen the suspension mechanism. It does this by making it easier for member states to notify circumstances which might lead to a suspension, by enabling the Commission to trigger the mechanism on its own initiative, and by tasking the Commission to send annual reports to the European Parliament and Council on the extent to which visa-exempt third countries continue to meet the necessary criteria.

The possible grounds for suspension have been extended, and include a decrease in cooperation on readmission, a substantial increase in the refusal rate of readmission applications, including for third-country nationals in transit, and a substantial increase in the risk to public policy or the internal security of the member states.

The use of the mechanism will also be facilitated by shortening reference periods and deadlines in order to allow for a faster procedure. In particular, the reference period for comparing the circumstances leading to the suspension with the situation during the previous year or before visa liberalisation is shortened from six to two months.

The suspension can be triggered by a notification of a member state or by the Commission. If a simple majority of member states notify, the Commission will have to adopt an implementing decision temporarily suspending the exemption from the visa requirement for certain categories of nationals of the third country concerned for a period of 9 months. During this period, the Commission shall establish an enhanced dialogue with the third country concerned to remedy the circumstances in question.

If the circumstances persist, the Commission shall adopt (at the latest two months prior to the expiry of the 9 months) a delegated act temporarily suspending the visa waiver for a further period of 18 months, for all the nationals of the third country concerned. Before the end of the period of validity of the delegated act, the Commission shall submit a report to the European Parliament and the Council. This report may be accompanied by a legislative proposal to transfer the reference to the third country concerned from Annex II (visa free countries) to Annex I (countries whose nationals need a visa to enter the Schengen area).

A monitoring mechanism has been introduced with the purpose of ensuring that third countries which have been granted visa exemption following a visa liberalisation dialogue continue to fulfil the criteria which were the basis for granting visa free status.

Ireland and the United Kingdom will not be subject to the application of these measures, in accordance with the protocols annexed to the EU treaties. The visa regime of these member states remains subject to their national legislation.

Next steps

The Council and the European Parliament now need to sign the adopted regulation. The signed text will be published in the EU Official Journal and will enter into force 20 days later.

On 27 February 2017, the Council decided to prolong the restrictive measures against Belarus for one year, until 28 February 2018. These measures include an arms embargo and an asset freeze and a travel ban against four people listed in connection with the unresolved disappearances of two opposition politicians, one businessman and one journalist in 1999 and in 2000. The Council also introduced an exemption to the restrictive measures to allow export of biathlon equipment to Belarus, which will remain subject to prior authorisation by national competent authorities on a case by case basis.

Tangible steps taken by Belarus to respect universal fundamental freedoms, rule of law and human rights will remain key for the shaping of the EU's future policy towards Belarus, as stated in Council conclusions of 15 February 2016.

The restrictive measures against Belarus were first introduced in 2004 in response to the disappearance of the four persons referred to above The Council later adopted further restrictive measures against those involved in the violation of international electoral standards and international human rights law, as well as in the crackdown on civil society and democratic opposition.  The arms embargo was introduced in 2011. On 15 February 2016, the Council decided to lift the restrictive measures against 170 individuals and three companies, while maintaining the arms embargo and the sanctions against the four persons. This decision was taken while acknowledging the steps taken by Belarus that have contributed to improving EU-Belarus relations.

Monday 27 February 2017
12.30 Meeting with President of Armenia Serzh Sargsyan (press statements ± 14.40)
19.00 Meeting with President Emma Marcegaglia and Director General Markus Beyrer of BusinessEurope

Tuesday 28 February 2017
17.15 Meeting with General Secretary Luca Visentini of European Trade Union (ETUC)

Wednesday 1 March 2017
11.30 Meeting with President Katherina Reiche of European Centre of Employers and Enterprises providing Public Services (CEEP)

Thursday 2 March 2017
11.00 Meeting with Taoiseach Enda Kenny

On 27 February 2017, the Council adopted legal acts imposing further restrictive measures against the Democratic People's Republic of Korea (DPRK).  These legal acts transpose the additional restrictive measures imposed by United Nations Security Council resolution (UNSCR) 2321 adopted on 30 November 2016. 

The measures include restrictions on transactions in coal, iron and iron ore from the DPRK, and a ban on imports of copper, nickel, silver, zinc as well as statues from the DPRK. The measures also include a ban on export of new helicopters and vessels to the DPRK, the tightening of existing restrictions in the transport sector as well as in the financial sector, like a prohibition for a DPRK diplomatic mission and for a DPRK diplomat to have more than one bank account in the EU and restrictions on the use of real estate property by the DPRK in the EU. 

The legal acts also provide for member states to take further measures to prevent specialised teaching or training of DPRK nationals in disciplines which would contribute to the DPRK's nuclear or ballistic-missile programmes; as well as to suspend scientific and technical cooperation involving persons or groups officially sponsored by or representing the DPRK except for medical exchanges. 

Like existing sanctions, these restrictive measures are designed in such a way as to avoid adverse humanitarian consequences for the country's civilian population. They therefore include exemptions for livelihood and humanitarian purposes, where appropriate.

The UNSCR also added 11 persons and 10 entities to the list of those subject to asset freeze as well as travel restrictions for persons. This addition was transposed into EU law by a Council decision adopted on 8 December 2016.

EU restrictive measures against North Korea were introduced on 22 December 2006. The existing measures implement all UNSC resolutions adopted in response to the DPRK's nuclear tests and launches using ballistic missile technology and include additional EU autonomous measures. They target North Korea's nuclear weapons and nuclear programmes, other weapon of mass destruction and ballistic missile programmes. The measures include prohibitions on the export and import of arms, goods, services and technology that could contribute to these programmes. 

On 27 February 2017, the Council adopted conclusions on EU priorities at United Nations human rights fora in 2017.

The conclusions reaffirm the EU's strong commitment to the United Nations human rights system. The EU will remain actively engaged at the UN Human Rights Council and the Third Committee of the General Assembly to defend and promote the universality, indivisibility, interdependence and interrelatedness of human rights. The EU will continue to draw the attention of these fora to human rights violations and abuses worldwide, and to the need for accountability and efforts to fight impunity. It will also seek to highlight positive experiences where action was taken to prevent or remedy human rights violations and abuses.

These Council conclusions are adopted on a yearly basis. They set out the main lines of action for the EU at UN human rights fora in the coming months.

Place:        Europa building, Brussels
Chair(s):    Dr Jose A. Herrera, Minister for sustainable development, the environment and climate change of Malta

All times are approximate and subject to change

+/- 08.00
Doorstep by Minister Herrera

+/- 09.00
Beginning of Council meeting (Roundtable)
Adoption of the agenda
Adoption of non-legislative A Items

+/- 09.10
Review of the Emissions Trading System (ETS) (public session)

Implementation of the 2030 Agenda for Sustainable Development

Greening the European Semester and the environmental implementation review (EIR)

+/- 13.45
Working lunch on EU Environmental Implementation Review (EIR)

+/- 15.15
Review of the Emissions Trading System (ETS) (public session)

Other business
-      Emissions Trading System (ETS) - Aviation (public session)
-      Low-emission mobility
-      Paris Agreement: International developments
-      EU action plan for the circular economy
-      Natura 2000 in the European solidarity corps
-      Luxembourg circular economy hotspot (Luxembourg, 20-22 June 2017)
-      Environmental concerns regarding Belarus nuclear power plant
-      Scientific Conference on "Sustainable development and climate changes in the light of the encyclical letter of Holy Father Francis, entitled Laudato Sí" (Warsaw, 15 October 2016)
-      Environmental liability and mining waste

+/- 17.30
Press conference (Justus Lipsius building press room - live streaming)

Place:        Europa building, Brussels
Chairs:      Konrad Mizzi, Maltese Minister

All times are approximate and subject to change

+/- 08.45
Doorstep by Minister Mizzi

+/- 09.30
Beginning of Council meeting (roundtable)
Adoption of the agenda
Adoption of non-legislative A items
Adoption of legislative A items (public session)

+/- 09.50
State of the Energy Union

+/- 10.35
Clean energy package (public session)

+/- 14.30
Any other business:
a)  Current legislative proposals (public session)
     i)   Security of gas supply
     ii)  Energy labelling
b)  European Nuclear Energy Forum
c)  Ocean Energy Forum

+/- 15.45
Press conference (live streaming)
Press room, Justus Lipsius building

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

H.E. Mr Jasem Mohamed A.A. ALBUDAIWI, Head of the Mission of the State of Kuwait to the European Union
H.E. Mr Dato' HASNUDIN BIN HAMZAH, Ambassador, Head of the Mission of Malaysia to the European Union
H.E. Mr KIM Hyoung-zhin, Ambassador, Head of the Mission of the Republic of Korea to the European Union
H.E. Mr Colin Michael CONNELLY,  Ambassador, Head of the Mission of the Republic of Trinidad and Tobago to the European Union

The Council presidency, the European Central Bank and the European Commission met with European social partners on 21 February 2017 to discuss current economic conditions and the economic outlook, and the role of the fiscal stance in supporting growth.

In his opening statement, Edward Scicluna, minister for finance of Malta and president of the Council said:

"Economic activity in the EU is still moderate but improving.  However, the recovery is still characterized by uneven economic growth and significant differences in the state of public finances across the member states. This state of affairs raises the question of what role should fiscal policy play in supporting economic growth. Within this context, there is the need to find the right balance between the stabilization function and the sustainability aspect of fiscal policy."

Commission vice-president Valdis Dombrovskis said:

"The economic recovery in Europe continues for the fifth consecutive year. All EU member states are back to economic growth. In these uncertain times, however, it is important that European economies stay competitive and are able to adapt to changing circumstances. We need to continue our structural reform effort. We also need to make growth inclusive, ensuring that the recovery is felt by all, especially by most vulnerable members of society. Several countries with high deficit and debt levels should continue bringing them down to make their economies more resilient to domestic and external economic shocks. Several member states need to address persistent pockets of weakness in their banking sector, including a high level of non-performing loans."

European Trade Union Confederation (ETUC) general secretary Luca Visentini commented:

"The ETUC welcomes the Commission calling for expansionary fiscal policies. With the current low demand, low inflation and high unemployment, a fiscal stimulus is the right way to go. But the rules of the Stability and Growth Pact prevent member states from engaging in expansionary fiscal policies. The ETUC calls for a revision of the Stability and Growth Pact and improved economic governance, allowing our economies to recover and pave the way for sustainable growth. The ETUC calls for an increase in public investment and a pay rise for all workers across Europe, to increase domestic demand, growth and job creation. This would be the right policy for the EU to pursue."

Speaking on behalf of the Confederation of European Business, BusinessEurope, director general Markus J. Beyrer commented:

"It is clear that the EU economy has picked up momentum in recent months, with businesses having been responsible for the majority of the 3 million new jobs created in the EU in the last 12 months. But growth continues to be supported by a number of temporary factors. Our concern is that EU member states are doing too little to take advantage of the favourable economic conditions. Countries need to step up their reform effort to improve underlying growth prospects and increase the resilience of the EU economy in an uncertain global political environment."

For the CEEP, the European Centre of Employers and Enterprises providing Public Services, general secretaryValeria Ronzitti said:

"CEEP welcomes the proposal from the European Commission for defining a euro area fiscal stance. We see the recent EC communication as a call to responsibility for the member states, a call to start considering the euro zone as a whole and not just as the sum of its individual components. However, the Stability and Growth Pact alone cannot oblige countries with fiscal room for manoeuvre to make use of it. Hence this very good first step from the EC needs to be reinforced in the EMU's completion process. Indeed, there is enough evidence by now that when member states go for efficient investments in public infrastructures then they show a path for the whole EU and not just for themselves. This is a way with the means to fight the aftermath of the crisis while looking straight into the future of our European economy."

Speaking on behalf of Europe's SMEs, new European Association of Craft, Small and Medium-Sized Enterprises (UEAPME) secretary general Veronique Willems said:

"Currently SMEs benefit from internal demand driven growth, but we also see that this dynamic is fading-out. Therefore, Europe has to strengthen its efforts to increase public investments and attract more private investments. This requires fiscal policies supporting future growth and the implementation of all pillars from the investment plan."

On the debate about the fiscal stance of the euro area, Ms Willems stated: "We do not see that targeting a specific fiscal stance is the most important policy aim, priority should be given to the quality of spending, if future growth and employment is the aim".

For the future Estonian Presidency (July to December 2017), minister for finance Sven Sester remarked:

"The Stability and Growth Pact continues to be the cornerstone for the euro area co-ordination of EU fiscal policy and we have already stretched the interpretation limits of flexibility. In the context of the recovery taking hold and output gaps closing, we don't really see the need for more fiscal stimulus. Still high and elevated debt levels in many countries must be tackled in a sustainable way and the current low interest environment is giving its impetus for achieving this goal.  Therefore, growth-friendly fiscal policy should follow with a balanced policy mix. In this regard, structural reforms, investments and the quality of public finances should be prioritized."

For the future Bulgarian Presidency (January to June 2018), deputy minister for finance Marinela Petrova remarked:

"The European project has been undergoing both economic and political challenges that have been also marked by a degree of uncertainty over the future growth prospects. In the current macroeconomic situation with very low inflation and zero interest rates, public investments tend to be more efficient both for the surplus countries, which have fiscal space, and for the countries which examine the impact of these effects. For the small open economies, however, fiscal stability has to be the main policy goal as far as the fiscal multipliers tend to be of a less significance there. On the other hand, long term economic growth and sound fiscal policy go hand in hand. Hence, the approach of solving the policy dilemma for expansionary or contractionary fiscal policy should consider primarily the need to ensure the long term sustainability of public finance."

Good afternoon everyone and sorry to surprise you with such a short Eurogroup. I guess half of your colleagues are out somewhere because they didn't expect us back already. 

I have a couple of sentences on the euro area economy, but I will let commissioner Pierre Moscovici say more on the basis of the winter forecast. 

We discussed the ease of doing business in the euro area. We had an interesting discussion where several colleagues told us what they were doing to improve the business climate in their countries - cutting red tape etc. - and this is all in our work stream on the investment climate and investments in the eurozone. We will continue work on that and come back to it in April. 

On the euro area economy, the recovery is clearly on track. There are lots of risks, downward risks also looming outside Europe and outside the euro area. Yet we are entering the fourth consecutive year of economic recovery and the recovery is gradually becoming stronger; real GDP grew steadily at 1.7% last year. 

Lots of positive signs coming from different euro area members states; the rate of unemployment is going down in most countries. I'll stop there and let the commissioner say more about that. 

Let me come quickly to the topic that probably interests you most today which is Greece. 

We have intensified talks in the last week, week and a half, with the institutions and the Greek government, to find enough common ground for the institutions to go back to Athens. The outcome of today is that they will go back to Athens in a very short time. They will work with the Greek authorities on the additional package of structural reforms; looking at the tax system, the pensions system, also labour market regulation. There will be a change in the policy mix, moving away from austerity and putting more emphasis on deep reforms, which has also been a key element for the IMF. So that is I think a good step and we have to realize that there is no agreement, there is no political agreement at this point, as that would be too early. It is a very positive and good step that the institutions have enough confidence and a common agreement to go back to Athens. 

A lot of work still needs to be done. I already mentioned the kind of reforms that it's about. In any country the combination of these topics would be difficult, so we will allow the institutions and the Greek government to do that work on the ground in more technical detail. 

And they will return to the Eurogroup if and when there is a staff level agreement and then we will have a final political discussion on the latest stages of the programme, on how to move forward. 

So, very happy with that outcome for today. Broad support, institutions willing and ready to go, and we hope to come back to you as soon as possible. 

On that element of time, because I know you will be asking about that, there is no liquidity issue in the short run for Greece. But I think we all feel a sense of urgency because of the key issue of confidence. If you want economic growth in Greece to continue and to start picking up, confidence is a key factor. That confidence has been returning in the last year and needs to strengthen, and we don't want to jeopardize that. So that would be a strong motivator to do the work as soon as possible.

I'll stop here and I'm sure you'll have lots of questions. Thanks, and lets listen to the commissioner.

Introduction

The Council considers that the budget for 2018 should provide adequate resources to continue supporting the traditional and evolving priorities within the Union, namely the recovery of the European economy, to address humanitarian and security challenges both within and outside the EU borders and to honour commitments already made under the current and previous programming periods.

The Council recalls the principle of solidarity and underlines that a transparent and an effective use of the EU budget will contribute to the materialisation of the Union's objectives and regain the credibility of the Union with the European citizens.

The budgetary procedure for 2018 is likely to take place in a context of budget constraints in several Member States. Therefore, the Council accentuates the need to improve the predictability of Member States' contributions to the Union's budget. The Council considers that the EU budget should seek to boost growth, promote employment and create new jobs, enhance effective EU cohesion, foster competitiveness and tackle the migration and security crises, while maintaining budgetary discipline at all levels. This can be achieved through the prioritisation of objectives, along with the allocation of available resources to programmes and actions that contribute the most towards achieving these aims.

The Council invites the Commission to present a budget in line with the aforementioned objectives, including a focus on areas that deliver EU added value.

Key elements of the budget for 2018

The Council reiterates the need for a realistic budget respecting the principles of sound financial management and annuality. The level of both commitment and payment appropriations should be kept under strict control and be based on real needs. The level of payment appropriations should be adequate and reflect the payment profiles of all programmes and with a clear focus on the expected needs for the current programming period.

The Council emphasises that the budget for 2018 and corrective budgetary tools shall strictly respect the relevant ceilings in accordance with the multiannual financial framework (MFF) Regulation for the period 2014-20201. Moreover, the Council reiterates the need to leave sufficient margins under the ceilings in order to be able to deal with unforeseen events.

The Council welcomes the phasing out of the backlog of unpaid bills from the previous programming period. It calls on the Commission to continue monitoring the implementation of the 2014-2020 programmes in order to ensure an orderly progression of payment appropriations consistent with the authorised commitment appropriations, thereby pre-empting future accumulation of outstanding unpaid bills.

The Council expects the Commission to make every effort to implement the budget within the allocations agreed in the annual budget, including the recourse to redeployments when appropriate. Corrective budgetary tools, such as amending budgets, should be kept to the strict minimum and in line with the Financial Regulation2 . The Council encourages the Commission to continue to rationalise the submission of draft amending budgets thereby contributing to increase the predictability within the budgetary cycle. If corrective measures prove to be necessary, the Council reaffirms its commitment to take a position on draft amending budgets as soon as possible.

As in the previous years, the Council calls on the Commission to deliver high-quality forecasts concerning both revenue and expenditure in its draft budget and during the whole budgetary process, together with timely, precise and transparent information on the underlying assumptions and budgetary figures3 . Reliable and accurate forecasts on all sources of revenue and on past and expected implementation are crucial in order to avoid either under- or over-budgeting, as well as unjustified and excessive carry-overs. It also allows the European Parliament and the Council to assess any possible requests for additional appropriations or redeployment of existing resources.

An accurate draft budget is essential to allow Member States to anticipate the level of their contributions to the Union's budget with a high degree of precision. In this context, the Council calls upon all actors, and notably the Commission, to undertake appropriate measures in order to avoid unexpected calls for additional contributions from the Member States, especially when the impact on national budgets could be high.

The Council recalls the principle of unity of the budget and calls on the Commission to cater for the necessary financial means in order to implement the Union's policies within the EU budget. The Council believes that full transparency with respect to assigned revenues is crucial for the sound financial management of Union funds. It calls on all institutions, agencies and other bodies to continue providing all the relevant information promptly and on a regular basis.

The Council recalls that all fines, penalties and accrued interest imposed by the Commission shall be transparently recorded as budgetary revenue in line with the provisions of the Financial Regulation.

The Council will continue to oversee the level of outstanding commitments (RAL)4 . It calls on the Commission to continue monitoring the evolution of the RAL by heading and by programme on a regular basis and to settle or decommit them in a timely manner and in line with the relevant rules. In preparing the draft budget, the Commission should take into account the close relationship between commitment and payment levels, the volume of outstanding commitments, the need to respect the MFF ceilings, the absorption capacity and past implementation rates.

Specific issuesComprehensive budgetary documents

The Council encourages the Commission to continuously improve the content of its budgetary documents in order to make them simpler, concise and transparent, clearly justifying the requested appropriations, including their repercussion in terms of payment profiles for the following years until 2020 and beyond. In this context, the Council invites the Commission to accompany any proposal modifying the agreed level of commitment appropriations with the corresponding impact in terms of payments over the current and next programming periods.

The Council acknowledges the usefulness of the Commission's "Active Monitoring and Forecast of Budget Implementation" system, with a view to, inter alia, prevent the possible build-up of an excessive backlog. It recalls that this reporting exercise should include regularly updated payment forecasts to be discussed at dedicated interinstitutional meetings, in line with point 36§3 of the Annex to the Interinstitutional Agreement on budgetary discipline, on cooperation in budgetary matters and on sound financial management (IIA)5 .

The Council invites the Commission to annex to the draft budget a comprehensive list of Commission proposals not yet adopted and which have a potential impact on the budget, including the level of appropriations concerned, by budget line.

The Council also invites the Commission to accompany the draft budget with a comprehensive table for the year 2018 consolidating an estimate of all types of internal assigned revenues by budget line, as well as an overview of the fines likely to be recorded as budgetary revenue.

The Council welcomes the good practice of accompanying every proposal for a transfer of appropriations related to a mobilisation of the European Globalisation Adjustment Fund and the Emergency Aid Reserve with an update of the level of implementation of the maximum annual amounts set for the special instrument in the financial year. Likewise, the Council invites the Commission to provide a regular update on the level of implementation of the advance payments related to the European Union Solidarity Fund.

When proposing the mobilisation of a special instrument, the Council invites the Commission to include in its proposal an update of the level of implementation of both commitment and payment appropriations of the respective special instrument.

The Council underlines that high quality programme statements and timely financial information on spending proposals are crucial for the European Parliament and the Council to establish, confirm or modify budgetary priorities. Programme statements should, in particular, focus on performance information and ways to improve it, including the results achieved, the justification for the level of appropriations requested, and on the added value of EU activities. This analysis should be clearly linked to the relevant budget lines in order to support the budgetary decision-making process.

Interinstitutional cooperation during the budgetary procedure

The Council encourages all institutions to collaborate efficiently and constructively, allowing for a smooth budgetary procedure and the establishment of the budget for 2018 within the deadlines set by the Treaty on the Functioning of the European Union (TFEU) and in line with the provisions of the IIA.

The Council calls on the Commission to ensure the timely presentation of the statement of estimates for 2018, allowing each institution enough time to undertake a detailed technical analysis of the disseminated estimates and to prepare thoroughly its position in accordance with an agreed pragmatic calendar.

The Council stresses the need to preserve the annual character of the budgetary procedure and to avoid discussions on issues not directly linked to the annual budget negotiations. It recalls that the purpose of the Conciliation Committee, convened in respect of Article 314 TFEU, is to establish the budget for 2018.

Furthermore, the Council calls on the Commission to ensure the timely and equal access to transparent and objective information and documents at all the stages of the conciliation negotiations.

Administrative expenditure

In the context of fiscal consolidation in Member States, national administrations are obliged to optimise the use of limited resources. There is also a need for rationalisation of EU's administrative expenditure. Therefore, the Council urges all institutions, bodies and agencies to reduce or freeze their administrative expenditure as much as possible and to request financing only for justified needs.

The Council calls on every institution and EU body to timely provide the Commission with clear, comprehensive and consolidated information of their administrative expenditure. In line with the Financial Regulation, the Commission shall attach to the draft budget the documents allowing the European Parliament and the Council to evaluate the situation and take well-founded decisions on the allocation and use of resources. Due attention should be paid to the comprehensibility and comparability over time and between institutions of the information provided.

The Council considers that the level of staff in all institutions, bodies and agencies needs to be kept under continuous monitoring. The Council recalls that 2017 is the last year to comply with the target, as stated in Point 27 of the IIA, to progressively reduce by 5 % the staff across all institutions, bodies and agencies. In this context, the Council proposes that an independent evaluation of the results is undertaken by the European Court of Auditors, covering all institutions, bodies and agencies. On the basis of the conclusions of this evaluation, the Council invites the Commission to present an appropriate follow-up proposal.

Decentralised agencies

While recognising the multiannual character of the actions carried out by some decentralised agencies, the Council recalls that over-budgeting has often led to a substantial and unjustified level of carry-overs. It reiterates the importance of keeping their funding under firm control and limiting it only to substantiated needs. The Council calls on the Commission, when establishing its draft budget for 2018, to continue taking into account unused appropriations and excessive accumulated cash-balances in order to bring down their annual surpluses. It also calls on the Commission to carefully check, and if necessary revise, the requests for funds and posts proposed by the agencies taking into account past implementation, vacancy rates, as well as the compliance with the 5 % staff reduction target.

In this context, the Council takes note of the work of the interinstitutional working group aiming at closer and more permanent scrutiny on the development of decentralised agencies.

The Council expects the Commission to continue providing the European Parliament and the Council with a comprehensive picture concerning agencies, including their building policy, together with the draft budget for 2018.

Conclusion

The Council considers that the EU budget should be prudent while providing sufficient resources in order to strengthen smart and inclusive growth and jobs, and to effectively respond to current and forthcoming challenges, including the measures to tackle the migration and security crises and to contribute to the political and economic stability in the EU's neighbouring countries. It underlines that a transparent, accurate and accountable use of Union's resources is an overarching principle to bring the EU citizens closer to the European project.

As in preceding years the Council will support a realistic budget for 2018, striking the right balance between fiscal prudence and new investments conducive to growth and jobs. It underlines that a timely, predictable, transparent and accurate assessment of needs based on comprehensive budgetary information is an essential tool to reach this objective.

The Council reiterates the need to leave sufficient margins under the ceilings in order to be able to deal with unforeseen circumstances while providing an adequate level of funding and respecting the commitments already made. Moreover, the Council emphasises on the importance of providing reliable and precise forecasts of revenue, allowing Member States to assess in a timely manner their expected contributions to the EU budget.

The Council reiterates the great importance it attaches to these guidelines and expects them to be duly taken into account when preparing the draft budget for 2018.

These guidelines will be forwarded to the European Parliament and the Commission, as well as to the other institutions."

__________________________________________________________________________________________________________________________________________________

(1) Council Regulation (EU, Euratom) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020 (OJ L 347, 20.12.2013, p.884).

(2) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ L 298, 26.10.2012, p. 1).

(3) As shown in the graph contained in the Annex, the provisional implementation of payment appropriations has considerably dropped in 2016.

(4) According to the Commission's implementation report of 18 January 2017, the level of Commission's outstanding commitments (RAL) amounted to EUR 237.5 billion at the end of 2016.

(5) Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management (OJ C 373, 20.12.2013, p. 1).

On 21 February 2017, the Council agreed its position on rules aimed at closing down 'hybrid mismatches' with the tax systems of third countries.

The draft directive is the latest of a number of measures designed to prevent tax avoidance by large companies.

It seeks to prevent them from exploiting disparities between two or more tax jurisdictions to reduce their overall tax liability. Such arrangements can result in a substantial erosion of the taxable bases of corporate taxpayers in the EU.

The directive will contribute to implementation of 2015 OECD recommendations addressing corporate tax base erosion and profit shifting.

“The EU is at the forefront of the fight against tax avoidance. We want to ensure coherent implementation in EU law of the OECD's BEPS action plan.”

Edward Scicluna, Minister for Finance of Malta, and President of the Council.

The proposal addresses hybrid mismatches with regard to non-EU countries, given that intra-EU disparities are already covered by the 'anti-tax-avoidance directive' adopted in July 2016. It complements and amends that directive accordingly.

The Council reached a compromise on the following issues:

• for hybrid regulatory capital, a carve-out from the rules is established for the banking sector. The carve-out will be limited in time, and the Commission will be asked to present a report assessing the consequences;
• for financial traders, a delimited approach is followed in line with that followed by the OECD;
• as regards implementation, a longer timeline is foreseen than that set for the July 2016 directive. Implementation is set for 1 January 2020 (one year later), and for 1 January 2022 as concerns one specific provision.

Next steps

The directive is one of a package of corporate taxation proposals presented by the Commission in October 2016.

Agreement was reached at a meeting of the Economic and Financial Affairs Council. The Council will adopt the directive once the European Parliament has given its opinion.

Member states will have until 31 December 2019 to transpose the directive into national laws and regulations.

The directive requires unanimity within the Council, after consulting the Parliament. (Legal basis: article 115 of the Treaty on the Functioning of the European Union.)

Let me, first of all, thank you for this meeting. We all truly needed it. Too much has happened over the past months in your country, and in the EU; too many new, and sometimes surprising opinions have been voiced over this time about our relations - and our common security - for us to pretend that everything is as it used to be. And thank you for being so open and frank with me.

Today I heard words which are promising for the future, words which explain a lot about the approach of the new administration in Washington. I repaid our guest by offering honesty in my assessment of the situation; I shared our concerns and hopes. Given that I am an incurably pro-American European who is fanatically devoted to transatlantic cooperation, I could afford to be outspoken even more.

I asked the Vice President directly if he shared my opinions on three key matters: the international order, security and the attitude of the new American administration towards the European Union. Firstly, I expressed my belief that maintaining order based on the rules of international law, where brute force and egoism do not determine everything, lies in the interest of the West. And, that maintaining that order can only be enforced through a common, mutually supportive and decisive policy of the whole of the Western community. For millions of people around the world, the predictability and stability of our approach provide a guarantee or - at the very least - hope that chaos, violence and arrogance will not triumph in a global dimension. Referring to some statements made in Munich just two days ago, I would like to say clearly that the reports of the death of the West have been greatly exaggerated. Whoever wants to demolish that order, anticipating a post-West order, must know that in its defence we will remain determined.

Secondly, our security is based on NATO and the closest possible transatlantic cooperation. We must work together to modernise the forms of this cooperation. Some of them should indeed be improved. But we should also, I believe, agree on one thing: the idea of NATO is not obsolete, just like the values which lay at its foundation are not obsolete. Let us discuss everything, starting with financial commitments - but only to strengthen our solidarity, never to weaken it.

Thirdly, we are counting, as always in the past, on the United States' wholehearted and unequivocal, let me repeat, unequivocal support for the idea of a united Europe. The world would be a decidedly worse place if Europe were not united. Americans know best what great value it is to be united, and that becoming divided is the prelude to a fall. It is in the interest of us all to prevent the disintegration of the West. And, as for our continent, in this respect we will not invent anything better than the European Union.

In reply to these three matters, I heard today from Vice President Pence three times "yes"! After such a positive declaration, both Europeans and Americans must simply practise what they preach.

On Saturday in Munich, you mentioned that during your trip across Europe in 1977 with your older brother, you found yourselves at some point in West Berlin, marvelling at what you saw, then crossing through Checkpoint Charlie only to see the "shadow of repression hanging over people". As you know, I had been living under this shadow for over thirty years. What I vividly remember from my own past is how after Martial Law was imposed in Poland on 13 December 1981, President Ronald Reagan urged all Americans to light a "solidarity candle" on Christmas Eve, as he did himself. It is not difficult to imagine how this moving message of American solidarity with the oppressed Polish nation against, as Reagan said, "the forces of tyranny and those who incite them from without", helped bring back hope and the determination not to give in.

In your speech you also highlighted the historic role of some American and European leaders, including Vaclav Havel and Lech Wałęsa. I was lucky to cooperate closely with the two of them in difficult times. Similarly to us, they all believed in the purpose of cooperation and solidarity between Europe and the US. We cannot let their efforts go to waste. After today's talks it will be easier for me to believe that we will fulfil this task.

The Council agreed on a general approach to strengthen cooperation between national authorities responsible for the enforcement of consumer protection laws.

The objective of the proposal is to modernise cooperation mechanisms to further reduce the harm  caused to consumers by cross-border infringements to EU consumer law. 

In particular, effective consumer protection has to respond to the challenges of the digital economy and the development of cross-border retail trade in the EU.

Chairing the Council meeting, the Maltese Minister for the Economy, Investment and Small Business, Dr. Chris Cardona, stressed that consumer authorities must be equipped with the right tools to generate and preserve confidence in the internal market. "This proposal is about trust, trade and innovation. Trust in e-commerce by consumers and companies is essential if the European economy is to grow", he added. 

This revision of the existing Consumer Protection Cooperation framework will give more powers to national authorities which may for example check if websites geo-block consumers, order the immediate take-down of websites hosting scams or request information from domain registrars and banks to detect the identity of the responsible trader. 

In case of EU-wide breaches of consumer rights, national enforcement authorities and the Commission will coordinate common actions to stop these practices, in particular in cases of widespread infringements with Union-dimension which are likely to harm consumers in a large part of the EU. 

Consumer trust in e-commerce 

Ineffective enforcement of cross-border infringements, in particular in the digital environment, enables traders to evade enforcement by relocating within the Union, giving rise to a distortion of competition for law-abiding traders operating either domestically or cross-border, and thus directly harming consumers and undermining consumer confidence in the single market. 

An increased level of harmonisation setting effective and efficient enforcement cooperation among public enforcement authorities is therefore necessary to detect, investigate and order the cessation of intra-Union infringements and widespread infringements. 

In order to further harmonise practices across the EU, the future regulation will set out a number of minimum investigation and enforcement  powers that every national competent authority will have to be able to exercise in order to coordinate properly in the fight against infringements. 

These powers will strike a balance between the interests protected by fundamental rights such as a high level of consumer protection, the freedom to conduct business and freedom of information. 

The mutual assistance mechanism between administrations will be strengthened to establish whether an intra-EU infringement has occurred and to bring about the cessation of that infringement. 

An improved alert mechanism will allow a competent authority to notify without delay the Commission and other competent authorities of any reasonable suspicion that an intra-Union infringement or widespread infringement is taking place on its territory that may affect consumers' interests in other member states. 

Competent authorities will also be able to open investigations on their own initiative if they become aware of intra-Union infringements or widespread infringements by means other than individual consumer complaints. 

Catching up with the digital economy 

On 25 May, the Commission presented the proposal on the review of the consumer protection cooperation as part of a broader package including proposals on cross-border parcel deliveries and on tackling unjustified geo-blocking. 

Currently, regulation 2006/2004 provides for harmonised rules and procedures to facilitate cooperation between national authorities responsible for the enforcement of cross-border consumer protection laws. 

The scope of the 2004 regulation covers 18 pieces of consumer legislation, including: provisions to protect consumers from unfair and misleading commercial communication; ensuring that consumers are adequately informed before making purchasing decisions; providing appropriate protection when entering contracts with businesses; as well as complaint and redress mechanisms and access to justice. 

However, following a review on the effectiveness of regulation 2006/2004, the Commission concluded it no longer effectively addresses the enforcement challenges of the digital single market. 

The 2015 digital single market strategy identified the need to enhance consumer trust through more rapid, agile and consistent enforcement of consumer rules as one of its priorities. 

Next steps 

The general approach enables the Council to start discussions with the European Parliament under the EU's ordinary legislative procedure. 

The internal market and consumer protection committee of the European Parliament (IMCO) has announced a vote on its position on 21 March 2017. 

Today the President of the European Council Donald Tusk met Prime Minister of Romania Sorin Grindeanu in Brussels. 

This first bilateral meeting since Prime Minister Grindeanu took office in January allowed for discussions on the main files on the European Union agenda as well as recent developments in Romania and the government's priorities. 

President Tusk welcomed the government's continued commitment to the European project and a stronger and united European Union, as Romania is preparing for the rotating Presidency of the Council of the EU in the first semester of 2019. 

President Tusk and Prime Minister Grindeanu discussed the central importance of the rule of law and the fight against corruption in ensuring that its citizens are able to benefit fully from all the opportunities offered by membership of the Union. 

President Tusk underlined the need to advance in the fight against corruption, safeguard the significant progress achieved and ensure its irreversibility, in line with the high expectations of Romanian society and the EU's values.

from 07.45
Arrivals (live streaming)

+/- 09.15
Doorstep by Minister Scicluna

+/- 09.30
Ministerial breakfast (Roundtable)

+/- 10.30
Beginning of the Council meeting
Adoption of the agenda

Anti-Tax Avoidance Directive (public session)

Any other business:
Current financial services legislative proposals (public session)

Approval of non-legislative A items

EU List of non-cooperative jurisdictions for tax purposes

Preparation of G20 Meeting on 17-18 March 2017

Discharge on the implementation of budget for 2015

Budget guidelines for 2018

Any other business

At the end of the meeting
Press conference (live streaming)
Main press room, Justus Lipsius building

Monday 20 February 2017
10:15 Meeting with United States Vice-President Mike Pence (media advisory)

Tuesday 21 February 2017
13.00 Meeting with President of the European Commission Jean-Claude Juncker

Wednesday 22 February 2017
11.00 Presentation of letters of credentials of ambassadors