Sunday, 16 May 2010

Eurozone next steps: ECOFIN agenda 18 May 2010

The market turmoil affecting the eurozone and the European Union as a whole continues as the Ministers of Finance prepare for the next meeting of the Economic and Financial Affairs (ECOFIN) Council on Tuesday, 18 May 2010. In customary manner, the Euro Group meets the evening before.

The Council has published a background note (dated 12 May 2010), which includes the following issues:

• Draft Directive on hedge funds and other alternative investment funds: Proposal for a Directive of the European Parliament and of the Council on Alternative Investment Fund Managers [AIFM]and amending directives 2003/41/EC and 2009/65/EC (referenced document 7377/10, although the link takes us to document 6795/3/10, described as a compromise).

• Presentation of the Commission’s preliminary draft for the general budget the European Union for 2011.

• Preparation of the integrated guidelines providing economic and employment policy recommendations to the EU member states, especially economic reforms, within the framework of the EU 2020 strategy for jobs and growth taking shape. [The EU Reflection Group has delivered the report: Project Europe 2030. Mario Monti has presented A new strategy for the single market. The World Economic Forum has published The Lisbon Review 2010 – Towards a More Competitive Europe? These new inputs have been presented on this blog.]

• The Council will hold an exchange of views on the follow-up to be given to its extraordinary meeting on 9 May 2010, and the Spanish and Portuguese delegations will present additional budgetary consolidation measures for 2010 and 2011. [The decisions taken to date have not calmed the financial markets or stock prices.]

• Commissioner Olli Rehn will present a communication from the Commission on enhanced economic policy coordination in the euro area. The proposals will be discussed by the task force chaired by the President of the European Council, Herman Van Rompuy. [The reception of the proposals and the member states’ positions will test the Council’s resolve and credibility.]

• The Council is expected to adopt conclusions on the role of budgetary frameworks in strengthening budgetary consolidation and supporting implementation of crisis policy exit strategies (document 9399/10 details ten points of desirable practices).

• Conclusions on the strengthening of EU arrangements to ensure financial stability and for crisis management in the financial sector.

• Commissioner Michel Barnier will present the Commission's work programme as regards regulation of financial services in the EU.

• The Council will take stock of preparations for the meeting of G-20 finance ministers and central bank governors that is due to take place in Busan (South Korea) on 4-5 June 2010.

• The Council is expected to adopt, without discussion, conclusions assessing progress on exit strategies for the unwinding of support schemes for the financial sector (document 9398/10).

• The Council is due to adopt, without discussion, conclusions taking stock of developments internationally as regards measures to combat climate change, in particular as regards so-called faststart measures in developing countries (document 9089/10).

A general comment: This eight page background note is one of the better ones I have seen. It recalls the basic issues of the agenda items, and most of the points contain links to (at least some) relevant documents for further study.

On the other hand, a lot is needed to convince financial markets and EU citizens.

Ralf Grahn