Main results of the ECOFIN Council of 4 November 2008
Christine Lagarde
© Consiglio dell’Unione europea
- from: 04.11.2008
- to: 04.11.2008
- In: Brussels
At the Council of EU economy and finance ministers (ECOFIN Council) of 4 November presided over by the French Minister for the Economy, Industry and Employment, Christine Lagarde, the ministers focused their discussions on the pursuit of efforts to respond to the financial crisis, citing the coordination of national action to support the financial sector, the granting of assistance to EU countries affected by the crisis and the common messages that the EU should present at the debate on overhauling the international financial system.
Firstly, the ministers expressed their desire to respond with determination to the economic slowdown confirmed by the autumn economic forecasts presented by the Commission on 3 November. The first response - monetary policy - will henceforth benefit from a more favourable structure since the strong drop in inflation. The ministers also emphasised the role of budgetary policy to mitigate the slowdown through the use of automatic stabilisers in line with the Stability and Growth Pact. In this context, the Commission indicated the flexibilities provided for since the revision in 2005. Ms Lagarde asked the European Investment Bank to submit proposals for boosting European growth at the next ECOFIN Council on 2 December. In addition to ongoing actions, the EIB should support the European economy and develop targeted sectoral actions, in particular for the automobile sector. The ministers decided to grant financial aid of 6.5 billion euros to Hungary in addition to the aid from the International Monetary Fund (IMF). They agreed on the principle of raising the current ceiling of Community financial aid from 12 to 25 billion euros.
Secondly, the ministers debated the common messages to send to the European Heads of State and Government who are meeting on 7 November to discuss the overhaul of the international financial system ahead of the international summit in Washington on 15 November. They agree on the following principles: once again placing the principles of responsibility and transparency at the heart of the system, ensuring appropriate regulation and monitoring; giving the IMF a primary role in ensuring the stability of the international financial system; and involving emerging and developing countries in this process.
Lastly, the ministers also continued their discussions on fiscal matters with a first debate on the compromise proposed by the Presidency regarding the application of reduced rates of VAT. They reached a political agreement on the creation of a system of exchanging information to combat VAT fraud in intra-community operations. Negotiations on an anti-fraud agreement with Liechtenstein were also discussed.
On the margins of the ECOFIN Council, Ms Lagarde met with representatives of the European Parliament at a meeting in troika format on 3 November to discuss the financial crisis in more detail. This subject was also at the heart of the macro-economic dialogue with employer and employee representatives on the same day.
- Updated: 29.12.2008
