dof eu scrutiny report 2012

Report of the Department of Finance and theDepartment of Public Expenditure and Reform

to the Oireachtas Under Section 2(5) of the European Union (Scrutiny) Act 2002 for the

period 1st July to 31st December 2012

Information for time period up to end December 2012, unless otherwise stated

IntroductionThis report has two parts. The first part sets out the principal developments during the Cypriot Presidency in the second half of 2012 as well as expected developments during the Irish Presidency (Jan – June 2013) in the policy areas which fall within the responsibility of the Department of Finance and the Department of Public Expenditure & Reform at EU level. Denmark held the Presidency of the European Union for the six-month period from January to June 2012.

Part 2 of the report sets out in tabular form details of Commission legislative proposals, communications and green or white papers for which Scrutiny notes have been submitted by the Department of Finance and the Department of Public Expenditure & Reform in the reporting period.

Part 1: Summary of Key Policy and Legislative Developments during the Cypriot Presidency of the EU

o Financial Services The European Response to the Financial Crisis and Financial Sector

Reforms Update on Status of Specific Legislative Proposals (Jan-Jun 2012) and

Expected Developments under the Cypriot Presidency Fight against Terrorist Financing and Weapons of Mass Destruction

Proliferation Restrictions on Economic and Financial Relations with Repressive

Regimeso Economic and Fiscal Policy

Commission’s Legislative Proposals on Economic Governance European Semester – Annual Stability Programme Update External Role of EU – IFIs and IMF Resources EU / IMF Programme for Ireland EU / IMF Programme of Financial Support for Portugal Greece European Stability Mechanism

o EU Budget and Multi-annual Financial Frameworko Key events and developments in the management of Structural Fundso Taxation

Direct Taxation Indirect Taxation

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FINANCIAL SERVICES

The European Response to the Financial Crisis and Financial Sector Reforms The Cypriot Presidency made some progress on dossiers taken over from the Danish Presidency including reaching political agreement on the Credit Rating Agencies' Regulation, on Venture Capital Funds and Social Entrepreneurship funds and general council agreement on Market Abuse Regulation (MAR).

In line with the October European Council conclusions, the Cypriot Presidency also made progress on the elements of the single rulebook; and in particular advanced discussions on the revised capital requirements (CRD IV) and reached general Council Agreement on the Single Supervisory Mechanism (SSM).

The Irish Presidency has given absolute priority to all files relating to the promotion of the Banking Union, along the lines of the priorities outlined by the European Council. We have achieved agreement on the Single Supervisory Mechanism (SSM) and on the Capital Requirements Package CRD IV/CRR. These significant achievements are important steps towards restoring confidence and building stability in the European banking system.

Update on Status of Progress of Key Legislative Proposals under the Cypriot Presidency, July– December 2012 This section outlines progress achieved on key legislative proposals under the Cypriot Presidency (i.e. up to 31 December 2012). Progress achieved to date under the Irish Presidency is addressed in the following section “Expected Developments under the Irish Presidency”.

Supervision Proposals (Single Supervisory Mechanism {SSM} & European Banking Authority {EBA})In May 2012 the Commission called for a banking union to restore confidence in banks and in the euro. This was reflected in the report on Economic and Monetary Union prepared by the Presidents of the European Council, the Commission, the Eurogroup and the European Central Bank. A complete banking union requires common supervision, deposit insurance, a common resolution framework and a common fiscal backstop.Centralising supervision is the first step in this process. Therefore, the immediate priority for this proposal is to create a Single Supervisory Mechanism for the euro area, with the ECB taking on the prudential supervision of credit institutions. Under this new mechanism, the ECB will carry out a wide range of key supervisory tasks over credit institutions in the euro area Member States. With a view to maintaining and deepening the internal market, other Member States will be allowed to enter into close collaboration with the ECB. Supervisory tasks not conferred on the ECB will remain with national supervisors. For example, national supervisors will remain in charge of consumer protection and

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the fight against money laundering, and of the supervision of third country credit institutions establishing branches or providing cross-border services within a Member State.As the SSM will apply to the euro area Member States (with opt-in for non euro area countries) the EBA regulation is amended to avoid the fragmentation of the internal market for financial services. The EBA proposal confirms the role of EBA in defining the single rulebook for the regulation of financial services in the Union and in ensuring the convergence and consistency of supervisory practices across the Union. Ecofin reached a unanimous agreement on both files (ECB regulation and a regulation amending the 2010 EBA regulation) at ECOFIN on 13 December. An initial trilogue was held on 18 December under the Cypriot Presidency at which a work programme was agreed to prioritise this file in the first half of the Irish Presidency.

Bank Resolution Framework [Crisis management] (COM (2012) 280) The financial crisis proved that effective systems were not in place to deal with financial institutions facing difficulties and illustrated a need for more robust crisis management arrangements at national level. In the absence of mechanisms to facilitate an orderly wind down of failing institutions EU member states had little choice but to use public funds to bail out the banking sector. Repeated bail-outs of banks through public funds are unfair to taxpayers and should not continue.

In late 2008 the Commission began working on a legislative proposal for crisis management culminating with publication of a proposal for establishing a framework for the recovery and resolution of credit institutions and investment firms on 6 June 2012. The proposal provides a common framework of rules and powers to help EU countries intervene to manage banks in difficulty. The framework provides comprehensive and effective arrangements to deal with failing banks at national level, as well as complete arrangements to tackle cross-border banks. There are three distinct phases to the framework, namely, (i) preparatory and preventative measures, (ii) early intervention and (iii) resolution tools.

Negotiations continued during the Cypriot Presidency at expert level at Council. The European Council conclusions on 14 December 2012 urged co-legislators to agree this proposal before end June 2013 and Council for their part would have to reach agreement by March 2013. The Irish Presidency is giving a high priority to this dossier.

Deposit Guarantee Scheme Directive [recast] (COM(2010) 368)The current proposal is for a full recast of the 2010 Deposit Guarantee Directive. It addresses issues including simplification and harmonisation of the provisions of the current Directive. In particular, it looks at the scope of the coverage and arrangements for payout; optional mutual borrowing among Deposit Guarantee Schemes in certain circumstances, the introduction of an information template and better access to information for depositors. The main aim of the new proposal is to significantly enhance depositors’ confidence by introducing a higher level of coverage, faster

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payout and more credible funding of the various Deposit Guarantee Schemes. Negotiations are on stand-by until positions emerge from the Council and the European Parliament as regards the banking resolution proposals

In its conclusions of 6 December 2012 the European Council envisaged Deposit Guarantee Scheme Directive being completed alongside the Banking Resolution proposal.

Capital Requirements Directive and Regulation (CRD IV) {COM (2011) 452 and 453)}The European Commission published proposals to implement the Basel III bank capital and liquidity agreement in the EU in July 2011. The CRD IV package of legislation comprises a full recast of Directives 2006/48/EC and 2006/49/EC (the existing Capital Requirements Directive). It is made up of a draft Regulation and a draft Directive, which will do the following:

• the draft Regulation, which will be directly applicable to credit institutions and investment firms, will contain the prudential requirements that currently exist in Directives 2006/48/EC and 2006/49/EC as amended, together with the annexes to these directives, and will also implement the new requirements contained in the Basel III agreement; and

• the draft Directive re-states provisions in the existing Capital Requirements Directive in relation to the establishment and undertaking of banking business and, in relation to supervision of such businesses in the single market. It contains new proposals in relation to corporate governance and sanctions, enhancements to supervisory power for institutions operating on a cross-border basis, and some amendments to Directive 2002/87/EC (the Financial Conglomerates Directive) in order to allow for technical standards to be developed. This is to ensure that institutions that are part of a financial conglomerate apply the appropriate calculation methods for the determination of required capital on a consolidated basis.

This was a priority Dossier for both the Danish and Cypriot Presidencies during 2012.

Trilogue negotiations had been progressing slowly with the proposals being examined Article by Article. However, between the November Ecofin and the December Ecofin significant progress was made on this package after a more constructive approach had been adopted by the co-legislators. This was a priority dossier for the Irish Presidency and agreement was reached on this file in March 2013.

Markets in Financial Instruments Directive (MiFID) (COM (2011) 656) and Markets in Financial Instruments Regulation (MiFIR) (COM (2011) 652). The main objective and subject-matter of this proposal is to harmonise national provisions concerning access to the activity of investment firms, regulated markets and data service providers, the modalities for their governance, and their supervisory framework.

The proposal, published in October 2011, consists of a Directive and a Regulation aimed to make financial markets more efficient, resilient and transparent, and to strengthen the protection of investors. New trading venues and products have come

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onto the scene and technological developments such as high frequency trading have altered the landscape so this proposal endeavours to keep pace with this and introduces rules for algorithmic trading and high frequency trading. This proposal responds to the need to improve the transparency and oversight of less regulated markets – including derivatives markets - and to address the issue of excessive price volatility in commodity derivatives markets. It introduces a new category of trading facility, called Organised Trading Facility (OTF) with specific rules applying to its operation. In addition it attempts to introduce a harmonised third country regime. The new framework will also increase the supervisory powers of regulators and provide clear operating rules for all trading activities.

Discussion continued at Council under the Cypriot Presidency but general agreement is yet to be reached.

Market Abuse Directive (MAD) – see also Market Abuse Regulation The existing regime on market abuse is being revised and the Market Abuse Directive (2003/6/EC) is to be replaced with a Regulation on market abuse (see COM (2011) 651), which in turn will be supplemented by this Directive on criminal sanctions (note: the proposed Market Abuse Regulation covers administrative sanctions only).

One of the flaws identified by the Commission in the current regime is the difficulty of enforcement, in particular as there are a variety of regimes across the EU. This proposed Directive will define those market abuse offences that should be regarded as criminal offences by all Member States. These offences will be intentional insider dealing, intentional market manipulation (including of benchmark setting rates such as LIBOR and EURIBOR), the attempt to commit insider dealing and market manipulation and inciting, aiding and abetting.

The Directive will provide that the sanctions for these offences should be effective, proportionate and dissuasive. General Council Approach was agreed at the JHA Council of Ministers on 7 December 2012.

Market Abuse Regulation (MAR) – see also the Market Abuse DirectiveThe Regulation seeks to adapt EU rules to developments in financial markets, notably by extending their scope to financial instruments only traded on new platforms and Over the Counter (OTC), which are currently not covered by EU legislation, and adapting rules to new technology.

The proposal includes a number of measures to ensure regulators have access to the information they need to detect and sanction market abuse (e.g. telecommunications data). The sanctions currently available to regulators are often seen to lack a deterrent effect and the proposal introduces tougher and greater harmonisation of administrative sanctions, including pecuniary administrative sanctions.

General Council Approach was agreed at COREPER on 5 December 2012.

Transparency DirectiveThe aim of Transparency Directive is to enhance the information made available about issuers whose securities are admitted to trading on a regulated market by inter

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alia setting minimum requirements in relation to the disclosure of periodic and ongoing information by issuers and on the disclosure of major shareholdings and voting rights. It also deals with the mechanisms through which regulated information is disseminated and stored. The proposed amendments are as a result of the requirement in the original Directive (Directive 2004/109/EC) to review the operation of the Directive after 5 years (Art 33).

The legislative proposal was adopted by the Commission in October 2011 and general approach was agreed at Coreper on 30 May 2012

Joint trilogues (led by Accounting Directive) on Country by Country Reporting are ongoing since early November but agreement on this joint chapter was not reached under the Cypriot Presidency.

Packaged Retail Investment Products (PRIPS)This Regulation refers directly to retail investment products that come in 'packaged' form, where the products intercede between the investor and the markets through a process of "packaging", wrapping or bundling together assets so as to create different exposures, provide different product features, or achieve different cost structures as compared with a direct holding.

The Regulation provides that these kinds of investment products must be accompanied by a standard information sheet ('key information document' or KID) in order to provide the investor with clear and comparable information, set out in the same way for all products. The proposal was published by the Commission in July 2012.

Undertakings for Collective Investment in Transferable Securities (UCITS) VThe proposal was published on 3 July 2012 and proposes a number of changes to the main UCITS directive, including Eligibility Criteria, Delegation of Custody, Liability, Prospectus Disclosure, Remuneration of UCITS Managers and Administrative Sanctions.

The timing of further meetings depends on progress on priority files.

The Insurance Mediation Directive (IMD)IMD was adopted in 2002 to set up a legal framework seeking to ensure a high level of professionalism and competence among insurance intermediaries and, more generally, a high level of consumer protection.

Currently, only agents and brokers are covered by the IMD. With the new proposal, published by the Commission in July 2012 the scope of the revised IMD will be extended to all sellers of insurance products, including insurance companies that sell directly to consumers. The timing of further meetings depends on progress on priority files.

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Credit Rating Agencies Regulation (COM (2011) 747) and Credit Rating Agencies Directive (COM (2011) 746) This proposal, published on 15 November 2011, is designed to open up the market for credit ratings, to make agencies more accountable for their ratings and to reduce the reliance by instrument issuers on the use of ratings. The Danish Presidency treated this file as a high priority and achieved a common approach at Council in May 2012.

Agreement was reached on this file at end of November by the Cypriot Presidency.

Investor Compensation Scheme Directive (COM(2010) 371)This proposal, published on 12 July 2010, is intended to ensure that the rules on investor protection are more efficient; that there is a more level playing field concerning the type of financial instruments that are protected; and the necessary arrangements are in place to make sure that investors are compensated on a timely basis.

Following the failure to reach First Reading agreement with the EP, the Polish Presidency received a mandate from Coreper in November 2011 to proceed to negotiations with the European Parliament for a second reading agreement. However, no meetings have taken place to date and the file is effectively frozen to avoid the strict timelines in an EP second reading procedure being activated.

Omnibus II (COM(2011) 008) On 19 January 2011, the European Commission published its proposal for an Omnibus II Directive. Omnibus II will amend the Solvency II Framework Directive (which sets out the solvency framework for insurance firms), to bring it in line with the EU’s Lisbon Treaty and to take account of the EU’s new supervisory structure.

The Cypriot Presidency continued with the trilogue discussions but there have been significant delays with the Omnibus II process as a result of differences between Council and Parliament, particularly on the issue of long-term insurance guarantees. This has culminated in EIOPA being requested to carry out an ex-ante impact assessment of long-term guarantee measures on the market place. The Terms of Reference (TOR) of that impact assessment have now been agreed and work has begun. The Commission now plan to have final report drafted by the 12th July 2013.

Proposal to amend Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) as regards the dates of its transposition and application and the date of repeal of certain Directives (Com (2012) 217). The deadline for transposition of Solvency II (2009/138/EC) was 31 October 2012 with a commencement date of 1 November 2012. On 22 May 2012 the Commission published its proposal to change the transposition and commencement dates of Solvency II to 30 June 2013 and 1 January 2014 respectively. These dates were finalised but are likely to change again.

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Directive 2009/138/EC (SOLVENCY II) On 10 July 2007, the European Commission adopted a proposal for Solvency II. Its aims and objectives were set out in previous 6-month report (July-December 2010). Level 2 implementing measures have been broadly agreed; however they cannot be signed off until after Omnibus II comes into force. In addition, as the new Directive will give Parliament the power to scrutinise the Level 2 measures, it is unlikely that they will be formally agreed till the second half of 2012.

It should be noted that Commission proposal (Com (2012) 217) have changed the transposition and commencement dates of Solvency II to 30 June 2013 and 1 January 2014 respectively.

Regulation of the European Parliament and of the Council on improving securities settlement in the European Union and on Central Securities Depositories and amending Directive 98/26/EC (Com (2012) 732)On 7 March 2012 the Commission published its proposal for a Central Securities Depositories (CSDs) regulation. The purpose of this proposal is to bring more safety and efficiency to securities settlement in Europe. It also seeks to shorten the time it takes for securities settlement and to minimise settlement fails. There is no comprehensive EU legislation in this area; however, the Settlement Finality Directive (98/26/EC) does cover aspects of this process.

This proposal, published on 7 March 2012, is considered an important part of the Commission’s efforts to create a sounder financial system. It should be noted that Ireland has no CSD’s. Negotiations continued under the Cypriot Presidency but there are still significant differences to be overcome before a general council agreement can be achieved.

Mortgage Credit Directive (COM (2011) 142)On 31 March 2011, the European Commission published a proposal for a Directive on Credit Agreements Relating to Residential Property (CARRP). This is also commonly known as the Mortgage Credit Directive (MCD). The proposed Directive aims to:• further the creation of an efficient and competitive internal market, in particular by facilitating cross-border activity;• enhance levels of consumer protection across the EU and improve consumer confidence; and• promote broader financial stability by ensuring more responsible lending of mortgage credit.

The Council's general approach with regard to the proposal was agreed by Coreper (part 2) on 30 May 2012. In June 2012 Members of the Economic and Monetary Affairs (ECON) Committee in the European Parliament agreed a report on the Commission proposal. The report contained new proposals which had not been included in the Commission proposal and consequently not discussed by Council.

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Trilogues with the European Parliament commenced in July 2012 and there have been two in total under the Cypriot Presidency.

Expected Developments under the Irish PresidencyThe Irish Presidency is prioritising the legislation necessary to achieve a Banking Union and in particular the Commission’s proposals on banking supervision, bank resolution and recovery, deposit insurance to protect consumers and CRD IV. The Irish Presidency is supporting the development of institutional and political structures to support the new Banking Union and to ensure an effective and smooth transition to the new framework.

The Capital Requirements Directive IV (CRD IV) seeks to ensure that the effectiveness of regulation of credit institutions and investment firms in the EU is strengthened and that financial stability is enhanced. The proposals also aim to transpose the international agreement on banking supervision reached by the Basel Committee on Banking Supervision as endorsed by the G20 Leaders. Trilogues are scheduled to continue under the Irish Presidency. The Irish Presidency has continued to give a high priority to this dossier. Following the commitment in June 2012 by Heads of State and Government to break the vicious cycle between banks and sovereigns, the Single Supervisory Mechanism Regulation will provide for the European Central Bank (ECB) to establish a Single Supervisory Mechanism (SSM) to provide direct oversight of banks and to assume prudent supervision of all credit institutions in the EU. Related changes to the European Banking Authority (EBA) will also be required. Agreement with the on this package of files was achieved with the European Parliament during March 2013 and endorsed by Council on 18 April. . The Directive on Banking Resolution seeks to ensure that banking institutions in difficulties can be allowed to fail without risk to financial stability, while avoiding costs to EU taxpayers. The framework will facilitate a spectrum of appropriate actions by supervisory authorities including preparatory and preventative measures such as reinforced supervision, early intervention and resolution tools. The Irish Presidency is continuing to give a high priority to this dossier and, intensive efforts are underway to accelerate Council discussions on this file with a view to reaching agreement on key political issues. Deposit Guarantee Schemes (DGS) ensure that customers are reimbursed (to a certain level) their deposits if their bank has failed. DGS is also important from the perspective of financial stability as the guarantee helps prevent depositors from making panic withdrawals from their bank if they believe it is in difficulty, thus preventing further negative economic consequences. In view of the links to banking

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resolution, discussions on Deposit Guarantee Directive will not be completed until discussions or findings on the Banking Resolution Regime are close to an end. The Irish Presidency seeks to progress discussions on all the interconnected elements of the Banking Union package and to conclude discussions on a number of the files.

Key priorities on the markets side include the Markets in Financial Instruments Directive and Regulation (MiFID/MiFIR) which seeks to harmonise national provisions concerning access to the activity of investment firms and related service providers, the modalities for their governance and their supervisory framework. The proposals are in line with the Presidency’s objectives of promoting greater confidence by making financial markets more efficient, resilient and transparent as well as strengthening the protection afforded to investors. New trading venues and products and technological developments such as high-frequency trading have altered the landscape of the markets. The proposals respond to the need to improve the transparency and oversight of less regulated markets, including derivatives markets, and to address the issue of excessive price volatility in commodity derivatives markets. The new framework will also increase the supervisory powers of regulators and provide clear operating rules for all trading activities.

The Presidency intends to achieve a General Council Approach on this dossier as soon as possible; thereafter it will seek to commence engagements with Parliament via Trilogues.The Irish Presidency has made good progress on the Market Abuse Regulation (MAR) in technical discussions with the Parliament and hopes to build on this in the coming months within political trilogues. It is held that to progress MAR is the most efficient way to ensure progress on the market abuse files as a whole.

The draft Regulation on Central Securities Depositories (CSD) Regulation seeks to bring more safety and efficiency to securities settlement in Europe. It also seeks to shorten the time it takes for securities settlement and to minimise settlement fails. There is no comprehensive EU legislation in this area however the Settlement Finality Directive (98/26/EC) does cover aspects of this process. This proposal was published on 7 March 2012 and is currently at Council working Party (expert level).

The Irish Presidency have reactivated this file and will be working towards Council agreement.

Trilogues with the European Parliament on the Mortgage Credit Directive have been on-going since July 2012 and will recommence under the Irish Presidency. Both the European Parliament and the European Commission are very keen on progressing this file and a final agreement should be within reach during the Irish Presidency.

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During our Presidency term, we expect proposals on Benchmarks and Money Market Funds as well as the Green Paper on Long Term financing which was published on 25 March. We hope to commence Council discussions on the revised anti-money laundering directive next month. Proposals on Shadow Banking, the Bank Accounts package and Securities law are also expected later this year

Fight against Terrorist Financing Council Regulation (EC) No. 2580/2001 is directed at terrorists and terrorist groups external to the EU. The list of persons, groups and entities who are subject to the asset freezing requirements of the Regulation was updated by:• Council Implementing Regulation (EU) No. 1015/2012 of 6 November 2012• Council Implementing Regulation (EU) No. 1169/2012 of 10 December 2012,and• Commission Implementing Regulation (EU) No. 1250/2012 of 20 December

2012.

Council Regulation (EC) No. 881/2002 directed at certain persons and entities associated with the Al-Qaida network was amended thirteen times by Commission Implementing Regulations to update the asset-freeze list in the six months to 31 December 2012. Some persons and entities previously listed under Council Regulation 881/2002 are now listed under Council Regulation (EU) No. 753/2011 of 1 August 2011 concerning restrictive measures against certain persons etc in Afghanistan.

Afghanistan

The list of persons and entities subject to the restrictive measures in Council Regulation 753/2011 has been amended by the following Council Implementing Regulations:

• Council Implementing Regulation (EU) No. 643/2012 of 16 July 2012• Council Implementing Regulation (EU) No. 705/2012 of 1 August 2012• Council Implementing Regulation (EU) No. 1139/2012 of 3 December 2012,

and• Council Implementing Regulation (EU) No. 1244/2012 of 20 December 2012

Fight against WMD Proliferation FinancingIranCouncil Regulation (EU) No. 267/2012 of 23 March replaced Council Regulation (EU) No. 961/2010 which implemented UN Security Council Resolution 1929 (2010). It provides for additional restrictive measures against Iran including additional trade restrictions affecting oil, petrochemical products and other goods.

Council Regulation (EU) No. 708/2012 of 2 August 2012 and Council Regulation (EU) No. 1067/2012 of 14 November 2012 make some technical amendments to Council Regulation (EU) No. 267/2012. The lists of persons and entities subject to the

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restrictive measures in Council Regulation 267/2012 has been amended by the following Council Implementing Regulations:

• Council Implementing Regulation (EU) No. 709/2012 of 2 August 2012• Council Implementing Regulation (EU) No. 945/2012 of 15 October 2012• Council Implementing Regulation (EU) No. 1016/2012 of 6 November 2012,

and• Council Implementing Regulation (EU) No. 1264/2012 of 21 December 2012

Sanctions against Iran contained in Council Regulation 267/2012 were strengthened by Council Regulation (EU) No. 1263/2012 of 21 December 2012. The additional measures include a ban on the import into the EU of natural gas from Iran.

Restrictions on Economic and Financial Relations with various Repressive Regimes BelarusCouncil Regulation (EU) No. 1014/2012 of 6 November 2012 and Council Implementing Regulation (EU) No. 1017/2012 of 6 November 2012 amend Council Regulation (EC) No. 765/2006 to clarify the listing procedure and consolidate the annexes of listed persons and entities.

Côte d’IvoireCouncil Regulation (EU) No. 617/2012 of 10 July 2012 makes some technical amendments to Council Regulation (EC) No. 174/2005 which places a ban on the supply of assistance related to military activities in Côte d’Ivoire or the supply of equipment that might be used for internal repression there.

Democratic Republic of the CongoCouncil Implementing Regulation (EU) No. 1251/2012 of 20 December 2012 added three persons to the list of individuals and entities subject to the freezing of assets under Council Regulation (EC) No 1183/2005 which requires the freezing of funds, financial assets and economic resources of persons and entities designated as acting in violation of the arms embargo or impeding the disarmament process.

EgyptCouncil Regulation (EU) No 1099/2012 of 26 November 2012 makes some technical amendments to Council Regulation (EU) No. 270/2011 which provides for the freezing of funds and economic resources owned or controlled by certain persons responsible for the misappropriation of Egyptian State funds, and persons associated with them.

EritreaCouncil Regulation (EU) No. 942/2012 of 15 October 2012 amends Regulation (EU) No 667/2010 to provide for a derogation for the provision of technical assistance,

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financing and financial assistance related to non-lethal military equipment intended solely for humanitarian purposes.

IranCouncil Regulation (EU) No. 1245/2012 of 20 December 2012 amends Council Regulation (EU) No. 359/2011 to provide for a derogation relating equipment which might be used for internal repression.

SomaliaCouncil Regulation (EU) No. 642/2012 of 16 July 2012 and Council Regulation (EU) No. 941/2012 of 15 October 2012 make some technical amendments to Council Regulation (EC) No. 147/2003 of 27 January 2003 which restricts the provision of financing or financial assistance related to military activities or the granting or sale of arms and related material to a person, entity or body in Somalia.

Council Regulation (EU) No. 641/2012 of 16 July 2012 and Council Implementing Regulation (EU) No. 943/2012 of 15 October 2012 make some technical amendments and amend the list of persons and entities set out in Council Regulation 356/2010 of 26 April 2010 which provides for the freezing of assets of persons and entities named in the Regulation who are persons or entities designated by the UN as engaging in or providing support for acts that threaten the peace, security or stability of Somalia.

SyriaCouncil Regulation 36/2012 of 18 January 2012 repeals Council Regulation (EU) No. 442/2011. The additional measures provided for include a prohibition on the export of telecommunications monitoring equipment, a prohibition on the participation in certain infrastructure projects and investment in such projects and additional restrictions on transfers of funds and the provision of financial services. Council Regulation (EU) No. 867/2012 of 24 September 2012 amends Council Regulation 36/2012 to provide that Member States should inspect all vessels and aircraft bound for Syria if they have information that provides reasonable grounds to believe that the cargo contains prohibited items.

The lists of persons and entities subject to the restrictive measures in Council Regulation 36/2012 has been amended by the following Council Implementing Regulations:

• Council Implementing Regulation (EU) No. 673/2012 of 23 July 2012• Council Implementing Regulation (EU) No. 742/2012 of 16 August 2012• Council Implementing Regulation (EU) No. 944/2012 of 15 October, and• Council Implementing Regulation (EU) No. 1117/2012 of 29 November 2012

TunisiaCouncil Regulation (EU) No 1100/2012 of 26 November 2012 makes some technical amendments to Council Regulation (EU) No. 101/2011 which provides for the freezing of funds and economic resources owned or controlled by certain persons

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responsible for the misappropriation of Tunisian State funds, and persons associated with them.

Sanctions remain in place in relation to the following regimes:• Burma/Myanmar• Guinea-Bissau• Iraq• North Korea• Lebanon• Liberia • Libya• Sudan • Yugoslavia – Former President Milosevic and those associated with him • Zimbabwe

Amendments were made to asset-freeze lists applying to some of these regimes by Commission Implementing Regulations in the second half of 2012.

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ECONOMIC AND FISCAL POLICY

Legislation on Economic Governance The Council reached agreement on a "general approach" on both texts of the ‘two pack’ of budgetary regulations on 21 February 2012. Two European parliamentary reports – the Gauzès Report (EPP/FR) in relation to COM (2011) 819 (on budgetary surveillance) and the Ferreira Report (S&D/PT) in relation to COM (2011) 821 (on the monitoring and assessment of draft budgetary plans) - have been approved at Committee level and voted in Plenary in June 2012 regarding their content. Since last July, an Ad-Hoc Working Group on Economic Governance (AHWG) has scrutinised the European Parliament's amendments. During the Cyprus Presidency, numerous trilogue meetings have taken place with the aim of reaching a negotiated agreement on the text of the regulations. As a result, considerable progress on a number of issues, in particular in relation to the Gauzès report on the draft budgetary surveillance regulation, was made during the Cypriot Presidency. On the commencement of the Irish Presidency, discussions intensified on the Ferreira report in order to achieve similar convergence of views.

Under the stewardship of the Irish Presidency, political agreement on the text of both regulations was reached on 20 February. The full European Parliament voted to accept the agreed text during its Plenary session on 12 March and it is anticipated that the Regulations will be formally adopted in May or June 2013.

The delay in reaching agreement on the text of the Ferreira report was due to the fact that a number of Member States could not accept one of the European Parliament’s proposals to include a so-called ‘review clause’ in the draft budgetary plans regulation which would serve to link the ‘two-pack’ to broader reforms of the EMU. The European Parliament required that the Declaration refer to the proposals in the Commission’s Blueprint ‘for a deep and genuine economic and monetary union’, which it published on 28th November 2012. The compromise agreed therefore includes a declaration made on behalf of the Commission to take concrete steps, specified therein, to further its work towards a deep and genuine EMU. The steps to be taken include the establishment of a study group composed of experts to consider the feasibility of a European Debt Redemption Fund and the issuance of short-term ‘eurobills’. The Group must present its final report to the Commission before the end of March 2014 but its recommendations will not be binding on the Commission.

Ministers at the 5 March ECOFIN welcomed the agreement on the ‘two pack’ which is a key addition to the economic governance regime of the euro area member countries. The legal linguists are currently finalising the translation of the agreed text and it is expected that the ‘two pack’ will be formally adopted at Council in May or June 2013.

European SemesterAt the ECOFIN on 9 October 2012, the Council took stock of possible changes to the

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Semester process in order to improve its implementation. The Cyprus Presidency subsequently produced a Synthesis Report in November 2012 on the lessons learned, based on discussions within various Council formations.

Building on the Synthesis Report, the Irish Presidency prepared a roadmap for the 2013 European Semester and presented it to the General Affairs Council on 11 December 2012. A Guidance Note was also produced by the Presidency in December 2012 for the chairs of the various sectoral committees involved in the formulation of Country Specific Recommendations.

Key procedural improvements for the 2013 Semester include:a. earlier presentation of the Alert Mechanism Report alongside the Annual Growth

Survey (both produced on 28 November last year);b. more regular and ongoing dialogue between the Commission and Member States,

including on the development of the Commission’s Country Specific Recommendations;

c. stronger Presidency role in planning and coordinating the work of all relevant Council formations and supporting committees under the oversight of the Permanent Representatives and the General Affairs Council;

d. greater involvement of parliaments, both at European and national levels, as well as other relevant stakeholders.

The presentation by the Commission on 28 November 2012 of the Annual Growth Survey 2013 signaled the commencement of the third European Semester for economic policy coordination. The main message of the survey this year is that although EU policies are beginning to show results in that tensions in financial markets are easing and there are signs that competitiveness is improving in some Member States, continued reform is needed to generate sustainable growth and jobs. Therefore, it contains the same five key priorities as those identified in the 2012 survey: pursuing differentiated growth-friendly fiscal consolidation; restoring normal lending to the economy; promoting growth and competitiveness; tackling unemployment and its social consequences and modernising public administration.

The survey is also underpinned by the 2013 Alert Mechanism Report. Based on economic analysis of 2011 data and a scoreboard of 11 macroeconomic indicators, the Report concluded that 14 Member States warrant an in-depth review, namely Belgium, Bulgaria, Denmark, Spain, France, Italy, Cyprus, Hungary, Malta, Netherlands, Slovenia, Finland, Sweden and the United Kingdom.

Council Conclusions welcoming the 2013 Annual Growth Survey and Alert Mechanism Report were adopted by the ECOFIN on 12 February for submission to the Spring European Council (14 -15 March). On the basis of those Conclusions, the Spring European Council gave policy guidance to Member States which should inform the contents of their National Reform Programmes (NRPs) and Stability or Convergence Programmes (SCPs) which are to be submitted by Member States before the end of April.

The Presidency, working in co-operation with the Council Secretariat, prepared a Synthesis report of Ministerial discussion to date at sectoral Councils on the Annual

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Growth Survey/Europe 2020 and presented that Report to the Spring European Council.

The 5 March ECOFIN also adopted Conclusions on the Commission’s Report on the Quality of Public Expenditure in the EU, which addresses two of the priorities identified in the Annual Growth Survey – the achievement of growth friendly fiscal consolidation and modernising public administration.

Throughout the entire 2013 Semester cycle, economic dialogue will be held with the European Parliament and representatives of Member States to ensure national ownership of the Country Specific Recommendations.

Expected Developments under the Irish PresidencyFollowing from the December European Council, which called for the ‘rapid adoption’ of the ‘two pack’, Presidency priorities on economic and financial issues included completing political agreement on the ‘two-pack’, which has now been achieved. The European Parliament voted to accept the agreed text on 12 March 2013 and the Presidency is currently working towards adoption of both regulations by the Council in May or June 2013.

President of the Council, Herman van Rompuy, was given a further mandate by the December 2012 European Council to present a roadmap on deeper integration of the economic and monetary union to the June 2013 European Council with particular focus on ex ante coordination of major reforms, the social dimension of the EU, feasibility of mutually agreed contracts and solidarity mechanisms. In response to his request for the Council to provide input into the debate on EMU, the Presidency will continue to engage with President van Rompuy in coordinating discussion on the EMU at the various Council formations and providing feedback to him after each ministerial discussion,.

The third European Semester began during the Cyprus Presidency, with publication of the Annual Growth Survey in November 2012. However, the bulk of the work falls to Ireland to take forward and complete by the June 2013 European Council. There was general agreement that the 2012 Semester worked well but it was also evident that improvements could be introduced to enhance the process. The Irish Presidency prepared a roadmap for the 2013 European Semester which is currently being implemented to improve the efficiency and effectiveness of the process.

The Commission will present by the end of April its Indepth Reviews (IDRs) of the 14 Member States identified in the Alert Mechanism Report as warranting further review.

Also in April, Member States will submit their Stability or Convergence Programmes and National Reform Programmes to the Commission and in May, the Commission will present its proposals for Country Specific Recommendations based on the contents of the Programmes and the IDRs. At the June ECOFIN, the Country Specific Recommendations will be approved and subsequently submitted to the June European Council for endorsement. The endorsed Recommendations will then be adopted by the July ECOFIN.

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External role of EU – IFIsBased on ongoing consultation with all Member States, the EU develops common positions on major issues arising in the IFIs and at G20 level.

During the period under review, the main issue on which Ireland contributed was in relation to technical discussions which were held in connection with the IMF quota formula review. An IMF member’s quota is broadly indicative of its global economic standing and also determines its financial relationship with the Fund. Under the 2010 Quota and Governance reforms of the IMF, a review of the quota formula (the technical basis for calculation of quota levels) and a General Review of Quota levels are being undertaken with an overall target date of January 2014. During Ireland’s Presidency of the Council of the European Union, Ireland, alongside the EU Commission and the ECB, participates in the EU delegation to the G20 Finance Ministers and Central Bank Governors’ and Deputies meetings, the first of which was held in Moscow in February 2013. A detailed account of Ireland’s participation at G20 level will be provided in the Report for the six months ended 30 June 2013.

EU/IMF Programme for IrelandDue to the rapidly evolving situation in Europe, this report covers developments in Europe from July to end December 2012. The previous Oireachtas Scrutiny Report1

summarised developments to end June 2012.

Under the EU/IMF Programme of Financial Support for Ireland, formal reviews must take place every quarter to assess compliance with Programme conditionality and, based on this assessment, to authorise further disbursements of loans.

The seventh quarterly review mission took place from 3rd – 12th July. All actions were met for quarter 2 2012 (with the exception of one target on liquidity buffers which was deferred by agreement taking account of European developments) in terms of both policy measures and quantitative targets. The overall assessment by the EU and IMF was positive, and again found that Ireland was observing all programme commitments. Consideration and approval of the seventh review by the IMF Executive Board took place on 5th September. The EU process concluded with approval by the Economic and Finance Committee (EFC)/Euro Working Group (EWG) on 6th-7th September. The review process concluded with approval by the EU and IMF and enabled the disbursement of some €1 billion of EFSM/EFSF funding, €0.9 billion of IMF funding and €0.8 billion of bilateral loan funding. In addition, disbursement of €0.5 billion was received from the UK in October under the bilateral loan agreement, though this was linked to the completion of the previous (sixth) programme review.

1 Report of the Department of Finance and the Department of Public Expenditure and Reform to the Oireachtas Under Section 2(5) of the European Union (Scrutiny) Act, 2002 for the period 1 December to 30 June 2012

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The eighth quarterly review mission took place from 16th – 25th October. All actions were met for quarter 3, 2012 in terms of both policy measures and quantitative targets. The overall assessment by the EU and IMF was positive, and again found that Ireland was observing all programme commitments. The review process concluded with approval by the EU and IMF. The IMF Executive Board approved the eighth review on 17th December 2012. The EU process concluded with approval by the EFC/EWG on 14th – 15th January, and at ECOFIN on 22nd January. The conclusion of both processes enabled the next tranche of funding to be issued: some €0.8 billion of EFSF/EFSM funding, €0.5 billion of bilateral loan funding, along with the €0.9 billion of IMF funding already disbursed.

The ninth review quarterly review mission took place from 29th January – 7th

February. All actions were met for quarter 4, 2012 in terms of both policy measures and quantitative targets. The overall assessment by the EU and IMF was positive, and again found that Ireland was observing all programme commitments. The review process concluded with approval by the EU and IMF. The IMF Executive Board approved the ninth review on 22nd March 2013. The EU process concluded with approval by the EFC/EWG on 4th – 5th April, and at ECOFIN on 12th April. The conclusion of both processes enables the next tranche of funding to be issued: some €1.6 billion of EFSF/EFSM funding, €0.750 billion of bilateral loan funding, along with the €1 billion of IMF funding already disbursed. Close to 85% of the available external funding has been drawn as at end-March 2013.

EU/IMF Programme of Financial Support for PortugalIn May 2011, ECOFIN adopted a Council Implementing Decision on granting Union Financial Assistance to Portugal (2011/344/EU). Under the EU/IMF Programme for Portugal, assistance of €78 billion will be provided over the period from June 2011 to mid-2014 subject to compliance with the conditions set out in the Programme documentation. Of the total, €52 billion of the Programme is to be sourced from the European Financial Stabilisation Mechanism (EFSM) and the EFSF, while the remaining €26 billion will be advanced by the IMF.

The programme remains broadly on track and the joint EU/IMF staffs mission for the sixth review under the Programme took place during November 2012. Consequently, Decision 2011/344/EU was amended on December 20, 2012. Disbursement of €2.5 billion was endorsed following the conclusion of the review process during December 2012 and January 2013, namely of €1.6 billion by the EU, and €0.9 billion by the IMF.

The sixth review concluded that the Programme remains broadly on track, with the authorities’ good efforts noted; difficult challenges remain, however. The staffs suggested that the Portuguese authorities are implementing the reform policies

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broadly as planned and have made good progress on the external and fiscal adjustments. At the same time, rising unemployment has emerged as a pressing concern. Nonetheless, the near-term outlook remains uncertain and sizable medium-term economic challenges remain. Hence, the staffs stressed the need to sustain efforts to make the tradable sector more competitive, boost long-term growth, and further advance fiscal consolidation.The 7th review of the Portuguese programme is currently under way.

EU/IMF Programme of Financial Support for GreeceOn 14 March 2012, euro area finance ministers approved financing of the second Greek economic adjustment programme for an amount of up to €130 billion until 2014, including an IMF contribution of €28 billion. This followed extensive restructuring of sovereign debt held by the private sector. The release of tranches is based on observance of quantitative performance criteria and a positive evaluation of progress made with respect to policy criteria in Council Decision 2011/734/EU of 12 July 2011 (as amended in November 2011 and on 13 March 2012) and the Memorandum of Understanding setting the economic policy conditionality, which was signed on 14 March. In March 2012, euro area Member States authorised the EFSF to release the first instalment of a total amount of €39.4 billion.

In December 2012, Council Decision 20122/734/EU was again amended as euro area finance ministers approved the first review of the second Greek Programme. In January 2013, the IMF approved the first and second reviews. Payment of sub-tranches due in January has been recommended in order to recapitalise the banking sector and, on account of Greece having met required Milestones, to meet fiscal requirements. This followed the extension of the date under the Excessive Deficit Procedure for Greece to reach its primary deficit target out to 2016. Finally, it was decided that further enhancement of Greek debt sustainability was required. This was achieved via a sovereign debt swap and also the extension of improved terms by official European creditors. The international assistance loans disbursed so far to Greece amount to €148.6 billion. Of this amount, €73.0 billion were disbursed within the first programme (€52.9 billion have been paid by the euro-area Member States and €20.1 billion by the IMF). Within the second programme, the EFSF and the IMF have already disbursed €75.6 billion as a part of the first disbursement of the second programme (including €25 billion for bank recapitalisation). The adjustment programme has been supported through financing by euro-area Member States and the IMF. The financing by the euro area Member States takes place through the EFSF, whilst the IMF financing will come through the Extended-Fund Facility (EFF).

According to the Troika’ assessment, Greece continues to meet all the criteria required for disbursement though risks to the programme remain significant. In particular, revenue and growth will have to improve to ensure programme

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success and therefore the structural reform and privatisation agendas are of vital importance. With this in mind, it also will be important for these agendas to be brought back on schedule after falling behind during 2012, including due to political reasons related to elections.

Spain Financial Sector Stabilisation ProgrammeOn 25 June 2012, the Spanish authorities formally requested financial assistance for the purpose of stabilising the Spanish banking sector. On 20 July 2012, the Eurogroup endorsed an agreement according to which up to €100 billion of EFSF funds have been made available in exchange for conditionality aiming at stabilising and enhancing the long-term stability of the sector. On December 3 2012, the authorities requested disbursement of close to €39.5 billion. As the programme is deemed on track, the funds were transferred to the Fund for Orderly Bank Restructuring (FROB) on December 11. The Spanish state will be liable for the funds, which will be disbursed to and administered by FROB on its behalf. Bank recapitalisation is being finalised, with segregation of impaired assets into an asset management company a cornerstone of the strategy. Financial assistance remains available until June 2013, though the restructuring of the banks in receipt of assistance is expected to take about five years.

Programme conditionality required various measures. Banks’ loan portfolios were subjected to a due diligence exercise and stress-testing. Further, impaired assets have been transferred to Sareb, the asset management company. As a result, banks were classified into various Groups according to their viability, capital requirement and need for state support. Recapitalisation also included burden-sharing, notably by executing liability management exercises on junior debt as well as raising of capital in markets. As a result, the total amount of EFSF funds requested is significantly below the estimated capitalisation requirement. Finally, there is significant conditionality contained in the Memorandum of Understanding regarding structural reform of the financial sector, notably with regard to regulation and supervision.

CyprusCyprus applied for international assistance from the European Union and the IMF on June 25 2012. The Eurogroup reached an agreement with the Cypriot authorities on the key elements necessary for a future macroeconomic adjustment programme on March 25 2013. The programme will address the exceptional challenges that Cyprus is facing and restore the viability of the financial sector, with the view to restoring sustainable growth and sound public finances. Financial assistance of up to €10 billion will be made available from the Troika. Together with the decisions taken by Cyprus, this results in a fully financed programme which will allow Cyprus’ public debt to remain on a sustainable path.

There will be an appropriate downsizing of the financial sector, with the domestic banking sector reaching the EU average by 2018. All deposits below €100,000 will be safeguarded in accordance with EU principles. The Eurogroup expects that the ESM Board of Governors will be in a position to formally approve the proposal for a financial assistance facility agreement by the third week of April 2013 subject to the completion of national procedures.

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European Stability Mechanism (ESM) The ESM Act 2012, which enabled Ireland’s ratification of the Treaty, was enacted in early July 2012 (No. 20 of 2012), and the instrument of ratification was lodged on 1 August, following a High Court challenge and Supreme Court appeal by Mr. Thomas Pringle T.D (see separate note below).

The ESM Treaty entered into force on 27 September 2012, when, in accordance with Article 48 of the ESM Treaty, ratification, approval or acceptance was deposited by signatories whose initial subscriptions represented no less than 90% of the total subscription in accordance with ESM Treaty Clause 48.1. It has now been ratified by all 17 Euro area member states.

Payment to ESMArticle 41(1) of the ESM Treaty establishes that payment of paid-in shares of the amount initially subscribed by each Member shall be made in five annual instalments of 20% each of the total amount (EUR €80 billion). Article 41(3) of the Treaty provides that an ESM Member may decide to accelerate the payment of its share of paid-in capital.

Under the contribution key set out in the ESM Treaty, Ireland will have to pay 1.592% (€1.274 billion) of the total paid in capital.

On 30 March 2012, Eurogroup finance ministers committed to accelerate the payment of paid-in capital2. This did not however affect the size of each instalment, which remains at 20% of the total amount.

On 13 September 2012, Eurogroup finance ministers committed to pay the first two instalments jointly in October 2012.

On 11 October 2012, under Section 2 of the ESM Act 2012, Ireland paid the first two of the five equal payments towards the paid in shares of the ESM totalling €509,504,000.00.

On 22 April 2013, also under section 2 of the ESM Act 2012, we paid the third instalment of €254,752,000.

The two remaining further instalments of €254,752,000 each are scheduled to be paid in October 2013 and April 2014.

Legal Challenge to the ESM and to the amendment of Article 136 of the Treaty on the Functioning of the EU (TFEU)The ESM Treaty and the underlying legislation in the ESM Act 2012, as well as the European Council Decision from March 2011 proposing an amendment to Article 136 TFEU concerning stability mechanisms, was the subject of an extensive legal challenge in the High Court in June, and a subsequent comprehensive appeal in the Supreme Court in July, relating to its compatibility with the Bunreacht na hÉireann and also with the EU Treaties and the validity of the European Council Decision. The 2 The Eurogroup agreed at the time that two tranches of capital would be paid in 2012, a first one in July, a second one by October. It also agreed that another two tranches would be paid in 2013 and a final tranche in the first half of 2014. In line with the ESM Treaty, the payment of the capital will be further accelerated if needed to maintain a 15% ratio between the paid-in capital and the outstanding amount of ESM issuances.

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challenge in relation to Bunreacht na hÉireann was unsuccessful, as was a request for an injunction to restrain Ireland’s ratification. A number of questions of EU law were referred by the Irish Supreme Court to the Court of Justice of the European Union (CJEU).

The CJEU agreed to hear this reference under its accelerated procedure and the case was heard on 23 October 2012. The CJEU, in its judgement delivered on 27th

November 2012, found no impediment in EU Law to the ESM Treaty or the Amendment to Article 136 of the TFEU. The matter now returns to the Supreme Court, following the ECJ ruling.

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EU BUDGET AND MULTI-ANNUAL FINANCIAL FRAMEWORK

EU Budget Multi-annual Financial Framework Proposal 2014-2020In July 2012, the EU Commission updated its proposed EU Budget Multi-annual Financial Framework (MFF) on foot of new economic data and in light of the pending accession of Croatia to the European Union. The stance of the net contributor countries during the negotiations made it inevitable that the overall financial package €1,048 bn would need to be reduced in order to reach agreement.

The special November 22nd - 23rd European Council meeting on the MFF, while constructive, ended without reaching agreement. However, there was a sense that Member States had shown a sufficient degree of potential convergence to make an agreement possible in the beginning of 2013. Subsequently the European Council met on 7th-8th February and reached political agreement on a package of €960 bn in commitments, this translates to a payment figure of €908 bn. Engagement with a view to securing agreement with the European Parliament has since begun under the Irish Presidency.

EU Annual Budget for 2013In July 2012, following a difficult discussion, the Council adopted its position on the Draft Budget making cuts in the Commission’s proposal in specific areas. In October 2012 the European Parliament adopted its position on the Draft Budget in response to Council’s position. In doing so it effectively reversed reductions made by the Council. Once these different positions were established, based on the provisions of the Treaties, a Conciliation Committee made up of members of the Budgetary Authority (the Council and the Parliament) was convened in November 2012. The Conciliation process did not reach agreement on the 2013 annual budget at the 9 November Budget Council. Subsequently the Commission presented a revised budget proposal on 23 November. Agreement was reached between the Council and Parliament with Council formally approving EU Budget 2013 on 6 December- with adoption by the European Parliament taking place on 12 December.

Revision of the EU Budget’s Financial RegulationFollowing the agreement on the revised Financial Regulation reached under the Danish Presidency the delegated act on the Rules of Application (RAP) for the new EU Financial Regulation (FR) were adopted by the Commission in October 2012. They were then published in the Official Journal on 31 December 2012. The Financial Regulation is the primary legislation underpinning the implementation of the EU Budget. Both the revised Regulation and the Rules of Application came into effect on 1 January 2013.

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Expected Developments under the Irish PresidencyEU Budget Multi-annual Financial Framework Proposal 2014-2020A European Council meeting took place on the 7th of February 2013. As an outcome at the February European Council was successfully achieved, Ireland now has responsibility for brokering agreement with the European Parliament on the legislation underpinning the new financial framework, i.e., the MFF regulation and the InterInstitutional Agreement. Work at both official level and senior political level with the Council, Commission and the European Parliament, had been on-going.This dossier, while complex is seen as a key priorityfor the Irish Presidency.

EU Annual Budget for 2014In the early part of 2013, both arms of the Budgetary Authority (the Council and the European Parliament) will set out their priorities for the EU Budget 2014. The European Commission will be expected to take these into account when proposing its Draft Budget 2014, now expected towards the end of May. The negotiation of EU Budget 2014 will be a matter for the Lithuanian Presidency.

EU Budget Discharge 2011Ireland will chair the discussions to prepare Council’s discharge recommendation on EU annual budget 2011. The Discharge is the Treaty based (Treaty of the functioning of the European Union (TFEU) Article 319) approval procedure for the manner in which a particular year’s EU Budget has been spent. The procedure works on the basis of a recommendation from Council to the Parliament to grant Discharge to the Commission. The Discharge discussion is based on the European Court of Auditors’ (ECA) annual report for the Budget year 2011.

Anti-fraud discussionsBased on a Council mandate agreed under the Danish Presidency the Irish Presidency is conducting the negotiations with the European Parliament on proposals for the HERCULE III regulation promoting activities in the field of protecting the financial interests of the EU and also for the PERICLES 2020 regulation on protecting the Euro from counterfeiting. It is hoped an agreement can reached between Council and the European Parliament on these dossiers by the end of the Presidency. A lawyer linguist review of the revised OLAF regulation on the conduct of OLAF’s investigations was followed by Council adopting its first reading position in February 2013. The European Parliament must now vote on the text.

Progress to mid April 2013

Negotiations at Council level on the 2014 - 2020 MFF are complete. Irelands’ key national priorities to protect CAP and secure additional funds for the BMW region and Rural Development were achieved. Also Ireland will be able to access new

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funding from under the new Youth Employment Initiative. With discussions having commenced on the legislative texts, the Irish Presidency has also been engaging with counterparts at the highest political levels ahead of an intensification of discussions on securing agreement on the underpinning MFF legislation.The Irish Presidencyis are hopeful of securing final agreement of Parliament and Council on the MFF by the end of our term.

As part of the Irish EU Presidency programme Minister of State Brian Hayes, T.D. presented Council’s Budget 2011 Discharge recommendation to the European Parliament’s Committee on Budgetary Control on February 19th 2013. He alsoattended the European Parliament’s debate and vote on Budget 2011 Discharge on 16 April. Minister of State Hayes also chaired the EU Budget Trilogue in Brussels on 19 March in advance of the publication of the Commission’s draft Budget 2014 proposal which is expected by the end of May.

As for the two anti-fraud related legislative proposals, the Irish Presidency has been continuing negotiations with the European Parliament on a compromise agreement as the Irish Presidency seeks to conclude political level negotiations during its term.

Key Events and Developments in the Management of Structural Funds

Cohesion Policy Legislative proposals for Cohesion policy during the period 2014-2020 were adopted by the European Commission on 6 October 2011. These will continue to be discussed by the Council (Structural Actions Working Group) and European Parliament during 2013. The new Regulations should enter into force in 2014. Ireland is scheduled to receive €900 million under the current round (2007 – 2013), which has a major impact on key economic and social programmes throughout the country. The Minister for Public Expenditure & Reform has argued strongly that funding must be maintained to help secure Ireland’s recovery. As a consequence of the agreement reached at the European Council on 7th-8th February 2013, it is expected that Ireland’s funding will actually increase slightly.

Cohesion Policy DebateNegotiations of the Cohesion package will continue during the Irish Presidency. Ireland has been actively engaging in the debate at EU level during the Cypriot Presidency including:

• Structural Actions Working Group: ongoing.• General Affairs Council: 16th October and 20th November 2013. • Directors General for Cohesion Policy, Cyprus: 10th October 2013.• Informal Ministerial Meeting, Cyprus: 6th November 2013. • European Council: 22nd – 23rd November 2013.

Substantial progress has been made on Cohesion by the Cypriot Presidency resulting in partial agreement on a further nine thematic blocks. Following intensive

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http://ec.europa.eu/regional_policy/what/future/proposals_2014_2020_en.cfm

http://ec.europa.eu/regional_policy/what/future/proposals_2014_2020_en.cfm


negotiations with the European Parliament, the Cyprus Presidency succeeded in obtaining an interim political agreement on all programming issues resulting in the completion of the main elements of the legislation at the Council level.

Under the Cyprus Presidency, the negotiations with the European Parliament started with informal trilogues in September 2012 and by the end of the year 24 trilogue meetings had taken place.

Expected Developments under the Irish PresidencyThe outstanding elements of the Cohesion package were agreed by the Council in March. In addition, work is underway to incorporate the Cohesion-related elements of the European Council Conclusions on the MFF into the legislative package.

Prolonged negotiations are expected with the European Parliament, on the Cohesion package over the next 6 months, with a possibility of negotiations concluding under the Irish Presidency, thus enabling commencement of the new Cohesion programmes in 2014.

The new Cohesion policy rules are closely linked to the MFF negotiations; they can only be adopted by the European Parliament and the Council once an agreement on the MFF has been reached.

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TAXATION

Direct Taxes Proposal for a Council Directive on a common system of financial transaction tax and amending Directive 2008/7/EC. In Sept 2011 the European Commission presented a proposal for a financial transaction tax (FTT)3 in the 27 Member States of the European Union. Further details are available in the January-June 2012 report.

At the ECOFIN meeting in June it became clear that an EU-wide FTT would not be agreed, and those countries who favour the tax will now try to introduce it by way of “enhanced co-operation”.

Eleven Member States (Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia) addressed formal requests to the Commission by letter between 28 September and 23 October 2012 indicating that they wish to establish enhanced cooperation between themselves in the area of a common system of FTT and that the Commission should submit a proposal to the Council to that end. Ireland is not going to be among the “enhanced co-operation” countries but will not stand in the way of those who want to introduce an FTT under this mechanism. The Minister for Finance has stated that, if an FTT cannot be introduced on a global basis, it would be better if it were introduced on an EU-wide basis. This would prevent any distortion of activity within the Union. Ireland has also indicated its opposition to dealing with tax measures under “enhanced co-operation”.

The enhanced co-operation mechanism is relatively new. This will be only the third measure in the EU to proceed by way of “enhanced co-operation”, and the first in taxation.

On 23 October 2012 the Commission submitted its proposal for a Council Decision to authorise enhanced cooperation in the area of financial transactions tax (Com (2012) 631).

At a Working Party on Tax Questions (WPTQ) meeting on 26 November the Commission made a presentation on changes that would be required to the FTT proposal to reflect that it would now proceed by way of enhanced co-operation rather than by all Member States. The Commission indicated it was considering a number of other changes, including a possible incorporation of the “issuance” principle, which would mean a transaction would be taxable if it was in respect of a share in a company registered in a participating State. The Commission’s presentation indicated that double taxation was possible but did not make any proposals for preventing it.

3 http://ec.europa.eu/taxation_customs/taxation/other_taxes/financial_sector/index_en.htm

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The UK proposed amendments to the text of the authorising decision which were subsequently circulated. The Commission indicated it did not accept the UK’s proposed amendments.

At the COREPER meeting on 30 November, a majority of countries agreed that the Council should write to the European Parliament seeking its support for the enhanced co-operation procedure (16 countries voted in favour of this; 10 countries, including Ireland, abstained). Assent was given by the Parliament on 12 December 2012.

Proposal for a Council Directive amending Directive 2003/48/EC on taxation of savings income in the form of interest payments.There are ongoing negotiations on widening the application of the EU Savings Tax Directive so that it covers payments that are equivalent to interest payments.

There is a draft mandate for the European Commission to open discussions with European “third countries”, including Switzerland, with a view to ensuring the continued equivalence of the measures applied by them with the text of the proposed amendments to the Savings Tax Directive.

Austria and Luxembourg have reservations about the mandate. Their concerns centre around the level playing field argument - they do not want what they see as a lesser standard to apply to non-EU countries such as Switzerland than to EU countries.

The European Council of 18-19 October concluded work and discussions should be carried forward on the revision of the Directive, and to reaching rapid agreement on the negotiating directives for savings agreements with third countries. However, in the conclusions to ECOFIN of 13 November, the Presidency noted the continuing reservations of Austria and Luxembourg. The positions of the two Member States appear to have hardened during the Cypriot Presidency, which did not engage in any bilateral negotiations with the main MS.

Expected Developments under the Irish PresidencyFinancial Transactions Tax

The enhanced co-operation proposal for an FTT received a qualified majority of 270 at a vote in COREPER on 18 January 2013. The ECOFIN Council on 22 January 2013 voted to authorise enhanced co-operation in the area of the FTT and the Commission issued a revised proposal on 14 February 2013. The first working party meeting on FTT was held on 21 February 2013.

Although Ireland will not be participating in enhanced co-operation, as Presidency of the Council, we will be acting impartially in facilitating discussions on the proposal and will seek to engage in a careful balancing of the desire by the ‘opt in’ countries to move ahead quickly, with the rights of the ‘opt out’ countries to have their concerns

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addressed.

Taxation of Savings IncomeThe Irish Presidency is seeking to work towards agreement of the revised Savings Directive and the negotiating mandates with third countries, in line with the direction of the European Council. Austria and Luxembourg continue to have reservations about the mandate. Progress is problematic but may be possible if movement is made in other areas. Luxembourg announced on 10 April 2013 it would begin to exchange information on deposit interest income from 1 January 2015. The Savings Directive and the negotiating mandates will be discussed at a special High Level Working Party meeting on tackling tax fraud and tax evasion on 2 May and are also scheduled for discussion at the ECOFIN meeting on 14 May. .

Indirect TaxProposal for a Council Directive amending Directive 77/388/EEC as regards the special scheme for travel agents (COM (2002) 64).

The 2002 proposal on travel agents COM (2002) 64 became deadlocked again in 2011 having been resurrected by the Spanish Presidency in January 2010 after several years in the doldrums. The Cypriot Presidency did not progress the dossier and it is not a priority for the Irish presidency.

The proposal is designed to simplify the existing special scheme under which travel agents account for VAT on their profit margin on packages sold to ordinary consumers, however, the proposed extension of the scheme to the re-selling of packages between travel agents remains the sticking point. It is unlikely that agreement can be achieved on this proposal in its current guise.

Proposal amending Directive 77/388/EEC as regards value added tax on services provided in the postal sector (COM (2003) 234 and COM (2004) 468).

The proposal on postal services COM (2003) 234, subject to some amendments under COM (2004) 468, was referenced in the Department’s Report on the Belgian Presidency (Jul-Dec 2010). There have been no discussions on this dossier in subsequent presidencies.

VAT on Insurance and Financial Services (COM (2007) 746 and COM (2007) 747).

The proposals on VAT on insurance and financial services presented by the Commission in December 2007 include a proposal for a Directive (COM (2007) 747) and an associated Regulation (COM (2007) 746). The objectives of the proposals are to provide legal certainty for economic operators and national tax administrations in respect of the scope of the VAT exemption generally applying to insurance and financial services; and, reduce the impact

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of VAT costs embedded/trapped in the cost structures of insurance and financial services providers.

The Polish Presidency continued the discussions on the dossier and presented a progress report to the Council of 19 December 2011 highlighting four major outstanding issues. These include the treatment of management services for investment funds, transfers of insurance/reinsurance portfolios, outsourcing in the financial services sector and transactions in commodity derivatives. The Danish or Cypriot Presidency did not deal with the dossier and it is not a priority for the Irish Presidency.

Ireland’s objective under this dossier is to achieve an outcome which protects Ireland’s and the EU’s attractiveness as a location for financial/insurance service

Council Regulation on implementation of new VAT rules for Telecommunications, Broadcasting and Electronic Services due to come into force in 2015 (COM (2012) 002).

Discussions on COM (2012) 002 commenced during the Danish Presidency and the proposal was adopted on 9 October 2012 during the Cypriot Presidency. The proposal defines a common approach to the expansion and administration of the so-called “mini One-Stop-Shop” online facility under which EU and non-EU suppliers of telecommunications, broadcasting and electronic services will have the option of accounting for VAT through a single Member State in respect of all of their EU supplies. The expanded facility will support new VAT rules due to come into force on 1 January 2015 whereby the place of taxation of these three services, when provided to ordinary consumers, will be the Member State of the consumer. The existing “mini One-Stop-Shop” scheme caters solely for non-EU suppliers of electronic services.

Ireland was supportive of the proposal.

Council Directive on the VAT treatment of Vouchers (COM (2012) 206).

Discussions on this proposal commenced during the Cypriot Presidency and will continue as a priority under the Irish Presidency. It is designed to modernise the VAT rules on vouchers in respect of single, multi-purpose and discount vouchers. Technically complex, the proposal is driven by the increasing functionality of vouchers, especially electronic vouchers, and the need for a consistent approach in the light of different VAT treatments which have developed across Member States. Such treatments may be contributing to double taxation or non-taxation where vouchers are supplied cross-border.

While sufficient clarity has yet to emerge from the Commission regarding the practicality of certain aspects of the proposal, Ireland can welcome the move

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to bring consistency and legal certainty to the tax treatment of vouchers. During the preliminary examination of the proposal by the Cypriot Presidency, Ireland cautioned on the need to ensure that new opportunities for tax avoidance are not created under the proposal.

Directive amending Directive 2006/112/EC on the common system of VAT as regards a quick reaction mechanism against VAT fraud (Com (2012) 428).

Discussions on proposal COM (2012) 428 commenced under the Cypriot presidency and are continuing as a priority under the Irish Presidency. The proposal is designed to fast-track the granting of derogations enabling Member States to introduce measures tackling sudden and massive VAT fraud. While initially catering for derogations based on the proven reverse charge mechanism, the proposal provides for other anti-fraud mechanisms, as yet undefined, to be accommodated in the future under the QRM framework. Under the reverse charge mechanism the business customer rather than the supplier, as under normal arrangements, must account for VAT.

Speed is of the essence in tackling VAT fraud and while reverse charge derogations are already available under the VAT Directive, the current procedure can take up to 8 months for adoption by Council. The QRM proposal seeks to speed up the process by enabling the Commission to authorise temporary derogations, of up to twelve months duration and by qualified majority vote, as requested by Member States faced with sudden and massive fraud. The fraudulent trading of greenhouse gas emissions allowances provides a recent example of such fraud where significant losses were suffered by a number of Member States, however, Ireland was not affected. The QRM proposal could reduce the timescale for obtaining a derogation to one month. Extending the derogation beyond twelve months would require a proposal to Council for adoption under normal unanimity procedures.

Proposal for a Council Regulation amending Implementing Regulation (EU) No 282/2011 as regards the place of supply of services (Com(2012) 763 final).

Discussion on Implementing Regulation COM (2012) 763 have been commenced by the Irish Presidency. The proposal is designed to ensure consistency across the Community in the application of new VAT rules to be introduced from 1 January 2015 in respect of telecommunications, broadcasting and electronic services. Under the new rules, the place of taxation of these services when supplied to ordinary consumers (i.e. business-to-consumer (B2C)) will shift from the Member State of the supplier to the Member State of the consumer.

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Specifically, the Implementing Regulation will clarify how the location of the customer is to be determined by tax authorities with a view to providing legal certainty and avoiding the double taxation or indeed non-taxation of such services.

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Part 2

Six-monthly report on Developments in the EU

Summary of draft EU legislative proposals submitted by the Department of Finance and Department of Public Expenditure and Reform for review by the Oireachtas

July to December 2012

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Commission Proposal Number

Proposal Date Submitted for Review by Department

Update

Com(2012) 340

Draft amending budget No.4 to the general budget 2012 - General statement of revenue. Statement of expenditure by Section - Section III - Commission.

Reviewed 14th November 2012 - No Further ScrutinySubmitted 21/08/2012

The Commission presented Draft Amending Budget No. 4 (DAB 4) to the General Budget for 2012 on 20th June 2012. The amending budget dealt with revisions to forecasts of Traditional Own Resources (TOR), VAT and GNI, calculation of the UK rebate and revisions to the financing of GNI reductions in favour of the Netherlands and Sweden. The Council adopted DAB 4 at its meeting on 24th September 2012. The European Parliament adopted DAB 4 on 23rd October 2012. The decision was published in the Official Journal of the European Union L 355 on 21st December 2012.

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Update

Com (2011) 746

Proposal for a Directive of the European Parliament and of the Council amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings of collective investment in transferable securities (UCITS) and Directive 2011/61/EU on Alternative Investment Funds Managers in respect of the excessive reliance on credit ratings.

Warrants Further Scrutiny 2nd February 2012

Given the important part played by credit rating agencies in the depth of the financial crisis, their regulation and proper functioning is a matter of ongoing commentary/analysis in the public domain. It was agreed that these proposals warrant further scrutiny.

This proposal is currently being negotiated at Council Working Party level

Com (2011) 594

Directive 2008/7/EC concerns indirect taxation on the raising of capital and provides for a general prohibition on such taxes, though certain countries may continue to levy them for the time being. This includes Ireland, which has a Stamp Duty on share transfers, which would have to be abolished if this Directive is agreed.

Submitted 25/10/11 Reviewed by Committee on Finance,Public Expenditure and Reform dated 14th November 2012.

Agreement on the text of the proposed Regulation has not been reached. Negotiations are ongoing with the European Parliament and Commission.

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Update

Com (2011) 747

Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1060/2009 on credit rating agencies.

Warrants Further Scrutiny 2nd February 2012.

Given the important part played by credit rating agencies in the depth of the financial crisis, their regulation and proper functioning is a matter of ongoing commentary/analysis in the public domain. It was agreed that these proposals warrant further scrutiny.

Agreement reached with EP in December 2012 .

Com (2011) 819

Proposal for a Regulation of the European Parliament and of the Council on the strengthening of economic and budgetary surveillance of Member States experiencing or threatened with serious difficulties with respect to their financial stability in the euro area.

Submitted 27/01/12Reviewed by Committee on Finance, Public Expenditure and Reform dated 14th November 2012.

Agreement on the text of the proposed Regulation was reached in February and the European Parliament voted to approve the text during its Plenary session on 12 March. It is expected that the regulation will be formally adopted in May/June 2013.

Com (2011) 821

Proposal for a Regulation of the European Parliament and of the Council on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area.

Submitted 27/01/12 Reviewed by Committee on Finance, Public Expenditure and Reform dated 14th November 2012.

Agreement on the text of the proposed Regulation was reached in February and the European Parliament voted to approve the text during its Plenary session on 12 March. It is expected that the regulation will be formally adopted in May/June 2013.

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Update

Com (2012) 102

Green Paper Shadow Banking Reviewed 14th November 2012 – No Further Scrutiny Submitted 05/07/2012.

The CION Green paper sets out the perceived scope of the shadow banking with a view to preparing proposals for greater regulation of the area. The responses to the consultation were published on the CION website. A CION legislative proposal on shadow banking is expected to be published March/April 2013.

Com (2012) 521

Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No. 111/2005 laying down rules for the monitoring of trade between the Community and third countries in drug precursors.

Submitted 06/11/2012. Discussions ongoing at Customs Union Working Group.

Com (2012) 574

Proposal for a Council Implementing Decision amending Implementing Decision 2011/344/EU on granting financial assistance to Portugal.

Reviewed 19th December 2012 – AdoptedSubmitted 104/10/12.

Adopted at Ecofin and Eurogroup on 6th December 2012, amending Implementing Decision 2011/344/EU on granting Union financial assistance to Portugal.

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Update

Com (2012) 632

Regarding Draft amending budget No.6 to the general budget 2012Com (2012) 632.


The Commission presented Draft Amending Budget No. 6 (DAB 6) to the General Budget for 2012 on 25th

October 2012. The Amending Budget dealt with payments needed for EU programmes. The European Council adopted an amended version of DAB 6 at its meeting on 6th December 2012. The Council’s position was taken in conjunction with the adoption of its position on the 2013 draft budget. The European Parliament approved, without amendment, the Council position on DAB 6 on 12th December 2012. The decision is awaiting publication in the Official Journal of the European Union.

Com(2011) 121

Proposal for a Council Directive on a Common Consolidated Corporate Tax Base (CCCTB).

Submitted 14/06/11 Reviewed by Committee on Finance,Public Expenditure and Reform dated 14th November 2012.

Partial agreement reached with European Parliament in April 2012.

Com(2012) 164

Simplifying the transfer of vehicle registered in another Member State within the Single Market.

Submitted 6/11/2012. Consultations ongoing during Ireland's Presidency.

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Update

Com(2012) 2 EU Council Regulation amending Implementing Regulation No 282/2011 to provide for the extension of the special scheme for the supply of electronic services to include telecommunications and broadcasting services to consumers within the Community.

Submitted 29/06/2012. Adopted 9 October 2012 by ECOFIN Council. Decision No 967/2012. Ref OJ L2012/290.

Com(2012) 206

Proposal for a COUNCIL DIRECTIVE amending Directive 2006/112/EC on the common system of value added tax, as regards the treatment of vouchers.

Reviewed 14th November 2012 – No Further ScrutinySubmitted 05/09/2012.

Under discussion by the Council Working Party on Indirect Taxes. Being progressed by the Irish Presidency.

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Update

Com(2012) 217

Proposal to amend Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) as regards the dates of its transposition and application and the date of repeal of certain Directives.

Submitted 12/06/2012. This Directive Proposal (Solvency II) is currently being amended by a proposal known as Omnibus II. There have been significant delays with the Omnibus II process as a result of differences between Council and Parliament, particularly on the issue of long-term insurance guarantees. EIOPA has been asked to carry out an ex-ante impact assessment of long-term guarantee measures on the market place and to provide their findings by the 14th June 2013. The commission now plan to have final report drafted by the 12th July 2013.

Com(2012) 275

Proposal for a Directive of the European Parliament and of The Council amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards depositary functions, remuneration policies and sanctions.

Submitted 09/08/2012. The Commission has subsequently adopted the proposal.

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Update

Com(2012) 291

Council Implementing Decision amending Implementing Decision 2011/77/EU on granting Union financial assistance to Ireland.

Reviewed 14th November 2012 – AdoptedSubmitted 05/07/2012.

Adopted at Ecofin and Eurogroup on 22nd January 2013, amending Implementing Decision 2011/77/EU on granting Union financial assistance to Ireland.

Com(2012) 336

Proposal for a COUNCIL REGULATION establishing a facility for providing financial assistance for Member States whose currency is not the euro.


This Regulation sets up a facility for Union financial assistance that may be granted to a non euro area Member State which is experiencing or is seriously threatened with difficulties in its balance of payments. Agreement on the text of the proposed Regulation has not been reached. Negotiations are ongoing with the European Parliament and Commission.

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Update

Com(2012) 350

Proposal for a Directive of the European Parliament and of The Council amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards depositary functions, remuneration policies and sanctions.

Submitted 09/08/2012. This proposal which proposes a number of changes to the main UCITS directive is currently being negotiated at Council Working Party in Brussels.

Com(2012) 352

Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on key information documents for investment products.


The proposal was published in July 2012 and is currently being negotiated at Council Working Party level in Brussels.

Com(2012) 356

Proposal for a COUNCIL DECISION authorising Hungary to introduce a special measure derogating from Article 193 of Directive 2006/112/EC on the common system of value added tax.


Adopted 4 October 2012 by EPSCO Council. Decision 2012/624/EU. Ref OJ L2012/274.

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Update

Com(2012) 360

Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision 2011/344/EU on granting Union financial assistance to Portugal.

Warrants Further Scrutiny Reviewed 14th November 2012 – AdoptedSubmitted 31/07/2012.

This proposal which seeks to revise the Insurance Mediation Directive (IMD), adopted in 2002 is currently being negotiated at Council Working Party level. The focus is on issues such as scope, conflicts of interest, professional qualifications, sanctions and measures.

Com(2012) 388

Amended proposal for a Council Regulation laying down the multiannual financial framework for the years 2014-2020.


Following the adoption last year of its proposal on the multiannual financial framework (MFF) 2014-2020 (COM(2011) 398), the Commission has subsequently, in COM(2012) 388, revised this regulation to take into account the pending accession of Croatia to the EU and recent updates of economic data. This amended proposal was discussed at the Council Meeting on 24th September 2012. The Committee of the Regions (COR) issued an opinion on the MFF which was published in the Official Journal of the European Union C391 on the 18th December 2012. The MFF was discussed by the European Parliament again on the 23rd October 2012.

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Update

Com(2012) 406

Proposal for a COUNCIL DECISION addressed to Spain on specific measures to reinforce financial stability.


Spain requested financial assistance on 25 June 2012. The agreement was endorsed by the Eurogroup meeting in Brussels on 20 July 2012, subject to conditionality as per this proposal.

Com(2012) 409

Proposal for a COUNCIL DECISION authorising the Republic of Lithuania to extend the application of a measure derogating from Article 193 of Directive 2006/112/EC on the common system of value added tax.


Adopted 13 November 2012 by ECOFIN Council. Decision 2012/704/EU. Ref OJ L2012/319.

Com(2012) 420

Amended proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on criminal sanctions for insider dealing and market manipulation (submitted in accordance with Article 293(2) TFEU).

Submitted 23/08/2012. This Directive proposal is part of a 2 part (Directive and Regulation) proposal and seeks to supplement existing regime on market abuse with the addition of a Directive on criminal sanctions. General Council agreement was reached in Dec 2012 with trilogues due to commence under the Irish Presidency.

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Update

Com(2012) 421

Amended proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on insider dealing and market manipulation (market abuse) (submitted in accordance with article 293(2) TFEU).

Submitted 23/08/2012. This Regulation proposal is part of a 2 part (Directive and Regulation) proposal and seeks to replace the existing regime on market abuse with a Regulation covering the administrative regime (including administrative sanctions). General Council agreement was reached in Dec 2012 with trilogues due to commence under the Irish Presidency.

Com(2012) 464

Amended proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing an action programme for customs in the European Union for the period 2014-2020 (Customs 2020) and repealing Decision N°624/2007/EC.

Submitted 25/09/2012. Trilogue discussions to be held.

Com(2012) 465

Amended proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing an action programme for taxation in the European Union for the period 2014-2020 (Fiscalis 2020) and repealing Decision N°1482/2007/EC.

Reviewed 19th December 2012 – no further scrutinySubmitted 19/11/2012.

Under discussion at Council and European Parliament level. Being progressed by the Irish Presidency.

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Update

Com(2012) 475

Proposal for a COUNCIL DECISION amending Decisions 2009/791/EC and 2009/1013/EU authorising Germany and Austria respectively to continue to apply a measure derogating from Articles 168 and 168a of Directive 2006/112/EC on the common system of value added tax.

Submitted 18/12/2012. Adopted 13 November 2012 by ECOFIN Council. Decision 2012/705/EU. Ref OJ L2012/319.

Com(2012) 490

Proposal for a Council Decision on the position to be adopted, on behalf of the European Union, in the EU-EFTA Joint Committee concerning the adoption of a decision amending the Convention of 20 May 1987 on a common transit procedure (Modification of HS codes and packaging codes).

Reviewed 19th December 2012 – no further scrutinySubmitted 04/10/2012.

Proposals likely to be adopted.

Com(2012) 511

Proposal for a COUNCIL REGULATION conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions.

Reviewed 19th December 2012 – warrants further scrutinySubmitted 12/12/2012.

This proposal provides a common framework of rules and powers to help EU countries intervene to manage banks in difficulty. Negotiations are currently at expert level in the Council. The European Council has urged co-legislators to agree this proposal before end June 2013.

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Update

Com(2012) 512

Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 1093/2010 establishing a European Supervisory Authority (European Banking Authority) as regards its interaction with Council Regulation (EU) No…/… conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions.


Ecofin reached a unanimous agreement on this proposal on 13 December. Trilogues are ongoing. The December European Council called on co-legislators to rapidly reach agreement on the regulations so as to allow implementation as soon as possible. This is a priority file for the Irish Presidency.

Com(2012) 536

Draft amending budget No.5 to the general budget 2012.

Submitted 27/09/2012. The Commission presented Draft Amending Budget No. 5 (DAB 5) to the General Budget for 2012 on 19th September 2012. The Amending budget dealt with the mobilization of the EU solidarity fund for Italy. The European Council adopted DAB 5 at its meeting on 20th November 2012. The European Parliament adopted DAB 5 on 21st November 2012. The decision was published in the Official Journal of the European Union L 15 on 18th January 2013.

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Update

Com(2012) 538

Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the mobilisation of the EU Solidarity Fund.


The Commission presented a proposal to mobilise the EU Solidarity Fund for Italy on 19th September 2012. The European Council approved this decision at its meeting on the 20th November 2012. The European Parliament approved this decision at its meeting on the 21st November 2012.

Com(2012) 548

EUROPEAN PARLIAMENT AND OF THE COUNCIL Amending Regulation (EC) No 273/2004 on drug precursors.

Discussions ongoing at CUWG.

Com(2012) 567

Proposal for a COUNCIL DECISION amending Decision 2009/790/EC authorising Poland to extend the application of a special measure derogating from Article 287 of Directive 2006/112/EC on the common system of value added tax.

Submitted 20/12/2012. Adopted 4 December 2012 by ECOFIN Council. Decision 2012/769/EU. Ref OJ L2012/338.

COM(2012) 611

Proposal for a COUNCIL DECISION authorising Bulgaria and Romania to apply measures derogating from Article 5 of Directive 2006/112/EC on the common system of value added tax.

Submitted 18/12/2012. Adopted 17 December 2012 by Environmental Council. Decision 2012/794/EU. Ref OJ L2012/349.

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Update

Com(2012) 631

Proposal for a COUNCIL DECISION authorising enhanced cooperation in the area of financial transaction tax.


Adopted 22 January 2013 by ECOFIN Council. Decision 2013/52/EU. Ref OJ L 2013/22/11.

COM(2012) 654

Proposal for a COUNCIL DECISION authorising Belgium to apply a special measure derogating from Article 285 of Directive 2006/112/EC on the common system of value added tax.

Submitted 20/12/2012. Adopted 22 January 2013 by ECOFIN Council. Decision: 2013/53/EU. Ref OJ L2013/22.

COM(2012) 661

Proposal for a COUNCIL DECISION amending Decision 2010/39/EU authorising Portugal to continue to apply a measure derogating from Articles 168, 193 and 250 of Directive 2006/112/EC on the common system of value added tax.

Submitted 20/12/2012. Adopted 22 January 2013 by ECOFIN Council. Decision 2013/56/EU. Ref OJ L2013/22.

COM(2012) 667

Proposal for a COUNCIL DECISION authorising Slovenia to apply a special measure derogating from Article 287 of Directive 2006/112/EC on the common system of value added tax.

Submitted 20/12/2012. Adopted 22 January 2013 by ECOFIN Council. Decision 2013/54/EU. Ref OJ L2013/22.

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dof eu scrutiny report 2012

Documents

ref oj l2013 22

bunreacht na hireann

deposit guarantee schemes

excessive price volatility

minimise settlement fails

credit rating agencies

central securities depositories

amending budget dealt