UK PRESIDENCY: THE TREASURY'S UPDATE
Letter from Ivan Lewis MP, Economic Secretary,
HM Treasury to the Chairman
I would like to take this opportunity to follow
up my letter to you of 19 July 2005[18]
by providing an overview of progress against the Treasury's priorities
during the UK's Presidency of the EU. The Paymaster General has
written separately on tax and customs policy, so I will not cover
those here.
On Budgetary issues, the UK Presidency managed
to reach agreement on both the 2006 annual EC Budget and the 2007-13
Financial Perspective, both of which represent a good outcome
for the UK. I wrote to you recently with full details of the 2006
EC Budget deal, and separately concerning Council's agreement
on the Future Financing negotiations. You are also aware of the
very positive work done under the UK Presidency on the Commission's
proposals for a "roadmap towards an integrated internal control
framework" for the EC budget (my letter of 5 December refers),
and I know that sub-committee A will be looking more closely at
those issues in its forthcoming inquiry.
On our broader Presidency priorities, you will
recall that our work programme for the ECOFIN Council identified
five key themes. We were able to make good progress in each of
these priority areas over the course of the UK Presidency, as
follows.
ECONOMIC REFORM
At the Manchester ECOFIN Informal meeting in
September, Finance Ministers and Business leaders reached consensus
on the reforms needed to deliver stronger economic growth and
social justice in Europe in the face of rapid global economic
change. Subsequently, in October the Chancellor published his
report "Global Europe: Full Employment Europe" setting
out proposals for major reforms to enable Europe to grow faster
and tackle unemployment, and Member States also published the
first Lisbon National Reform Programmes (NRPs) as part of the
re-launched Lisbon Strategy.
In December, ECOFIN reviewed the Lisbon NRPs
and concluded that implementation of national reforms is key for
Europe's long-term economic success, and the Council would continue
to monitor and evaluate rigorously Member States' progress on
reform. In parallel, the Council also welcomed a report on globalisation
and agreed, for the first time, Conclusions setting out the reforms
necessary for Europe to respond successfully to the opportunities
and challenges of globalisation. ECOFIN confirmed that globalisation
represents opportunities for Europe provided we put in place the
policies needed to realise these, and that labour market reform
is key, but policies need to reflect the different social models
in Member States.
BETTER REGULATION
Regulatory reform was at the heart of our Presidency
programme, and we made good progress on several fronts, including
a. commitment to test to the competitiveness impact of all new
EU regulations in impact assessments, and a commitment for administrative
burdens to be measured in all EU proposals. We are working closely
with our successors the Austrian and Finnish Presidencies to agree
a forward work programme on better regulation, with a focus on
risk-based regulation and business consultation.
FINANCIAL SERVICES
The UK Presidency set the shape of financial
services policy in the European Union for the medium term, with
ECOFIN endorsing the approach set out in the Commission's Green
Paper on financial services policy 2005-10. My Explanatory Memorandum
on the subsequent Commission White Paper (15345/05) has been recommended
for debate in Standing Committee B, and I hope the Committee will
agree that the approach it outlines—which includes a strong
focus on implementing and enforcing existing measures, ensuring
the better regulation agenda is rigorously applied and recognising
the importance of European financial services remain globally
competitive—is very much in line with the UK's priorities
in this area and is therefore to be welcomed. The Chairs of the
Lamfalussy Committees also reported to ECOFIN in October on how
they plan to cooperate more effectively to reduce burdens on business.
As highlighted in my letter of 19 July, we continued
to press during the UK Presidency for the full and rapid implementation
of the EU's Counter-Terrorism Action Plan. In this context finance
ministers agreed to work together proactively in support of further
action in Europe to freeze terrorist assets.
We achieved a first-reading deal with the European
Parliament on the Capital Requirements Directive, which introduces
modern risk-based capital rules for EU banks and investment firms.
We also completed work on the Third Money Laundering Directive
and reached a Council common position on the Funds Transfers Regulation,
both of which apply a risk-based approach to combating terrorist
financing and financial crime.
FINANCING FOR
DEVELOPMENT
As part of our commitment to a more outward-looking
Europe, Finance Ministers agreed an EU package on financing for
development ahead of the UN Millennium Development Summit in September,
including a doubling of annual aid from 2004 to 2010. On 9 September,
with the participation of the UK, France, Italy, Spain and Sweden,
we launched the pilot International Finance Facility for Immunisation,
which could save 5 million children's lives by 2015.
Finance Ministers also emphasised the need for
an ambitious outcome to the present round of WTO trade talks.
While it was disappointing that greater progress could not be
made in Hong Kong in December the UK will continue to work for
an ambitious and pro-development outcome to the Doha round in
2006.
WORKING WITH
GLOBAL PARTNERS
The UK Presidency worked to develop real engagement
with Europe's international partners on a number of fronts. The
inaugural EU-US economic ministerial in November agreed an action
plan on all areas of transatlantic economic cooperation, including
agreement to hold the first regulatory cooperation forum, and
we brokered in December a joint EU-US statement agreeing future
priorities for the Financial Markets Regulatory Dialogue. We are
pleased that this work will now be taken forward under successive
Presidencies, with "EU-US dialogue" provisionally tabled
for another ECOFIN discussion under the Austrian Presidency in
June.
The Commission has also identified an EU-India
financial services dialogue as a priority for 2005-10. And, the
UK Presidency worked through the EU to build support for economic
regeneration in the West Bank and Gaza Strip, in support of the
Middle East Peace Process.
I hope the above gives you an overview of the
key achievements of what was a very successful UK Presidency.
We are now working closely with the Austrians and Finns to ensure
that progress on UK priorities continues into 2006, and look forward
to continued engagement with your committee as we do so.
6 March 2006
18 Correspondence with Ministers, 45th Report of Session
2005-06, HL Paper 243, pp 81-82. Back
| 
