7 Financial assistance for non-eurozone
Member States
| (a)
(34077)
12201/12
COM(12) 336
(b)
(34657)
5477/13
—
|
Draft Regulation establishing a facility for providing financial assistance for Member States whose currency is not the euro
ECB Opinion on a draft Council Regulation establishing a facility for providing financial assistance for Member States whose currency is not the euro (CON/2013/2)
|
| Legal base | (a) Article 352 TFEU; consent; unanimity
(b) ¯
|
| Department | HM Treasury
|
| Basis of consideration | Minister's letter of 27 March 2013
|
| Previous Committee Reports | (a) HC 86-xi (2012-13), chapter 15 (5 September 2012)
(b) HC 86-xxxv (2012-13), chapter 13 (13 March 2013)
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| Discussion in Council | Not known
|
| Committee's assessment | Documents legally and politically important
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| Committee's decision | Not cleared; further information requested
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Background
7.1 Council Regulation (EC) 332/2002 established a medium
term financial assistance facility for Member States whose currency
is not the euro, known as the EU balance of payments facility.
Decisions to grant such financial assistance, by way of conditional
loans, are made by the Council and the total of loans outstanding
may not exceed €50 billion (£40.34 billion).
7.2 In June 2012 the Commission presented this
draft Regulation, document (a), seeking to develop the facility,
primarily in four ways:
- introducing two new instruments
¯
enhanced conditions credit lines (ECCL) and precautionary conditioned
credit lines (PCCL) to the facility, which can currently provide
a "loan or appropriate financing facility";
- specifying the form of monitoring to apply throughout
a programme and potential suspension of programme and other EU
funds resulting from non-compliance with programme conditionality
¯
this includes eliminating duplicate reporting requirements under
the European Semester and for countries under the Excessive Deficit
and the Macro-economic Imbalances Procedures;
- increasing the involvement of relevant institutions
(European Parliament, European Central Bank (ECB), European Supervisory
Authorities (ESAs)) in the agreement, surveillance and progress
of programmes; and
- simplifying and codifying existing activation
procedures, not provided for in the current Regulation.
7.3 The total amount available would remain unchanged,
with decision making remaining with the Council.
7.4 In this Opinion, document (b), the ECB shows
itself broadly supportive of the draft Regulation and does not
highlight any areas of real concern.
7.5 When, in September 2012, we considered the
draft Regulation, although acknowledging the Government's support
for the intentions of the proposal, we noted that it was considering
the implications for the UK. Most importantly, we assumed that
the Government was considering the implication of the use of Article
352 TFEU for the provisions of Section 8 of the European Union
Act 2011. So before considering the matter further we asked to
hear about the outcome of those considerations. Meanwhile the
draft Regulation remained (and remains) under scrutiny.
7.6 When, last month, we considered the ECB Opinion
we noted that:
- the Government did not comment
directly on the Opinion, instead it merely reminded us that the
Government was considering the implications of the proposed Regulation
for the UK and would ensure that the national interest was protected;
and
- it told us that there was currently no agreed
timetable for the draft Regulation and that the Irish Presidency
work programme did not include any reference to it.
7.7 We commented that we had noted that the Government
was considering the implications of the draft Regulation for the
UK ¯
and, importantly, had assumed that this included the implication
of the use of Article 352 TFEU for the provisions of Section 8
of the European Union Act 2011 ¯
and had asked to hear about
the outcome of those considerations. We said that we
assumed that the response to that request would be taking into
account any relevant aspects of the ECB Opinion. Meanwhile that
document also remains under scrutiny.[22]
The Minister's letter
7.8 The Financial Secretary to the Treasury (Greg
Clark) writes now to update us on the timetable for discussing
the draft Regulation. He says that:
- the timetable has still not
been agreed and there is no indication that the dossier is to
be taken forward in the near future;
- it is currently not on the Irish Presidency's
Council work programme;
- there is also as yet, no further clarity on the
read across to the Banking Union proposals that would influence
the draft Regulation; and
- he will write with an assessment of the proposal
and the Government's position on it when the issue is taken forward,
taking into account relevant aspects of the ECB Opinion.
7.9 The Minister adds that it is correct that,
as with any proposal for legislation with a legal base of Article
352 TFEU, this proposal, as and when it proceeds, would require
not only unanimous support from the Member States in the Council
but also an Act of Parliament.
Conclusion
7.10 We are grateful to the Minister for these
comments and look forward to having in due course an assessment
of the proposal and the Government's position on it, taking into
account relevant aspects of the ECB Opinion. Meanwhile both documents
remain under scrutiny.
22 See headnote. Back
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