Joan Burton (Dublin West, Labour)
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117. To ask the Minister for Finance if he will report on the ECOFIN meeting on 16 June 2017; and if he will make a statement on the matter. [31492/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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This Council, which took place in Luxembourg, was the last one under the Maltese Presidency and my first since my appointment as Minister for Finance.

The first item on the agenda was a proposal for amending the Council Directives dealing with a reduced VAT rate for electronically supplied publications (e-Publications). This proposal is part of a project to modernise the VAT regime of the European Union. It allows Member States to charge the same reduced rates of VAT to electronic publications as they would apply to non-electronic publications.

The second proposal dealt with the General Reverse Charge Mechanism and is essentially a measure to combat VAT fraud by making the customer responsible for the payment of the tax rather than the supplier as under the present system.

No agreement was reached on these two tax proposals and the matter will now fall to the Estonian Presidency to address.

Ministers also discussed a number of legislative proposals that dealt with strengthening the Banking Union and also dealt with risk-reduction measures. Two of the proposals – namely a draft directive on the ranking of unsecured debt instruments in insolvency proceedings (bank creditor hierarchy) and a draft regulation on transitional arrangements to phase in the regulatory capital impact of the IFRS 9 international accounting standard – were agreed by Minsters. This means that the Presidency can commence discussion on these draft proposals with the European Parliament as soon as the Parliament has approved its own negotiating stance.

The Council noted the progress made by working parties on the remaining four draft proposals. These are:

1. proposal for amending the existing regulations and Directives on bank capital requirements;

2. proposal for a directive amending the directive on bank recovery and resolution as regards the loss-absorbing and recapitalisation capacity of banks;

3. proposal for a regulation amending regulation 806/14 on the EU's single resolution mechanism as regards the loss-absorbing and recapitalisation capacity of banks;

4. proposal for a regulation establishing a European deposit insurance scheme.

The first three proposals - issued by the Commission in November 2016 - are aimed at reducing risk in the financial system by making banks more resilient to external shocks. They are designed to incorporate into EU law standards agreed at the global level by the Basel Committee on Banking Supervision and the Financial Stability Board. The final proposal sets out to establish an EU-level insurance scheme (European deposit insurance scheme) to strengthen the protection of bank deposits. Work will now continue at a technical level on these proposals.

Ministers were also debriefed on the state of play of current legislative proposals in the field of financial services.

On the remaining portion of the agenda, Ministers were also informed on the state of play as regards:

1. work aimed at tackling high levels of non-performing loans in Europe;

2. the Midterm review of the Capital Markets Union action plan; and

3. progress made on the implementation of the action plan for strengthening the fight against terrorist financing.

The Council will return to the first two topics in July with a view to adopting draft Council conclusions.

The Council also held a discussion on the 2017 European Semester and the corresponding Country-Specific Recommendations (CSRs). The Council approved the CSRs for onward transmission to the June European Council for endorsement with a view to final adoption at the July ECOFIN Council.

Finally, Ministers made decisions under the Stability and Growth Pact to abrogate the Excessive Deficit Procedures for Portugal and Croatia. Also, a recommendation was made to Romania to correct a significant deviation from the adjustment path towards its medium-term budgetary objective.