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
European Central Bank 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)
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| Legal base | (a) Article 352 TFEU; consent; unanimity
(b) —
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| Department | HM Treasury
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| Basis of consideration | Minister's letter of 17 March 2014
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| Previous Committee Reports | (a) HC 86-xi (2012-13), chapter 15 (5 September 2012), HC 86-xxxviii (2012-13), chapter 7 (17 April 2013) and HC 83-xvii (2013-14), chapter 5 (16 October 2013)
(b) HC 86-xxxv (2012-13), chapter 13 (13 March 2013), HC 86-xxxviii (2012-13), chapter 7 (17 April 2013) and HC 83-xvii (2013-14), chapter 5 (16 October 2013)
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| Discussion in Council | None planned
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| Committee's assessment | Legally and politically important
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| Committee's decision | Not cleared; await further developments
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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 (£41.8 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 In this Opinion, document (b), the ECB showed
itself broadly supportive of the draft Regulation and did not
highlight any areas of real concern.
7.4 We have considered this proposal three times,
on the last occasion in October 2013 reporting that it seemed
possible that Council consideration of the proposal was about
to begin and noting again that the draft Regulation is not only
subject to unanimity, but, being based on Article 352 TFEU, would
require for the UK, on the basis of Section 8 of the European
Union Act 2011, an Act of Parliament. We asked for an indication,
given the Presidency's intention to seek a General Approach before
the end of 2013, of the Government's timetable for the Bill which
would need to be enacted before the Government could acquiesce
in adoption of the draft Regulation.[13]
The Minister's letter of 17 March 2014
7.5 The Economic Secretary to the Treasury (Nicky
Morgan) writes now to tells us that:
· in
early December 2013, negotiations moved quickly and the Lithuanian
Presidency attempted to reach a General Approach by the end of
the year;
· the
proposal was discussed at the ECOFIN Council of 10 December 2013,
when, given the Government's substantive concerns, the Chancellor
of the Exchequer outlined that the UK could not support the proposal
at the Council;
· other
Member States also expressed reservations;
· since
there was a lack of consensus at that Council and in view of the
fact that the Greek Presidency has recently made clear that the
proposal is not a priority for it, the draft Regulation will not
progress further at this stage; and
· the
Government will not, therefore, be seeking parliamentary time
for this draft Regulation.
Conclusion
- We are grateful to the Minister
for this information. However, we will continue to hold both documents
under scrutiny against the possibility of attempts to revive consideration
in the future, which we would expect the Government to draw to
our attention.
13 See headnote. Back
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