---

EU: Economic and Financial Affairs Council

My right honourable friend the Chancellor of the Exchequer (Gordon Brown) has made the following Written Ministerial Statement. The Economic and Financial Affairs Council was held on 27 February in Brussels. The UK was represented by the Economic Secretary to the Treasury, Ed Balls. The items on the agenda were as follows: Implementation of the Stability and Growth Pact Stability and Convergence Programmes: ECOFIN adopted Council opinions on the stability programmes of Slovenia, Portugal, the Netherlands, Luxembourg, Italy, Ireland, France and Germany, and on the convergence programmes of Cyprus, the United Kingdom, Slovakia, Sweden, Poland, Malta, Lithuania, Hungary, Greece, Finland, Estonia and Denmark. Ministers held an exchange of views on the issues raised by the assessments. The president of the Council concluded that member states should continue to implement reforms to reduce structural deficits, avoid pro-cyclical expenditure and ensure the sustainability of public finances and the quality of expenditure. Excessive Deficit Procedure: Ministers adopted a Council recommendation with a view to bringing to an end the excessive deficit in Poland. It recommended that the Polish authorities put an end to the present excessive deficit situation by 2007, reducing the general government deficit in a credible and sustainable manner. The UK supports a prudent interpretation of the stability and growth pact (SGP), which takes into account the level of debt, the influence of the cycle and the level of public investment, and ensures that any recommendations reflect each member state's economic position. Preparation of the European Council (8 to 9 March 2007) ECOFIN discussed three issues in preparation for the spring European Council. These were: Key Issues Paper: This discussion followed the orientation debate on the key issues paper at the last ECOFIN meeting. The key issues paper informs the spring European Council of ECOFIN Ministers’ priorities. The UK stressed the need for an energy policy for Europe based on careful assessment of the impact on cost-effectiveness, security and diversification of supply and subsidiarity, creating a positive framework for investment in the energy sector; the need to complete the single market and to further integrate European financial markets to enhance their efficiency and global competitiveness; the importance of long-term fiscal sustainability and supported ongoing work to combat fiscal fraud and harmful tax practices. Updating the Broad Economic Policy Guidelines 2005-08: Ministers agreed the broad economic policy guidelines for the spring Council. Reducing administrative burdens: ECOFIN agreed Council conclusions on reducing administrative burdens. The UK supports the conclusions, which include a 25 per cent target for the reduction of administrative burdens arising from EU legislation. The UK already has a domestic target to reduce administrative burdens by the same amount and will continue to press for a risk-based approach to European regulation. General budget of the European Union Discharge procedure in respect of the implementation of the budget for 2005: Council adopted conclusions recommending that the European Parliament grant discharge to the Commission on the EC's 2005 budget. The UK stressed the need to address the persistent inability of the Court of Auditors to give a positive statement of assurance on the budget and said that the Commission, member states and the court itself all had a role to play in this respect. The UK urged other member states to look at ways, compatible with their own institutional arrangements, to improve their management of EU funds at a national level, along the lines of the UK's initiative announced in November 2006. Financial Services Clearing and Settlement: Ministers agreed conclusions on target 2 securities, which establish issues of principle relevant to future decisions on target 2 securities, and received an update from the Commission on the implementation of the code of conduct. The UK stressed the importance of an open, transparent and market-led approach to clearing and settlement initiatives.