ECOFIN: Ministers debate financial assistance to Ukraine, a revision of fiscal rules and a recovery plan for Hungary
Today in Brussels, EU finance ministers led by Zbyněk Stanjura discussed the continuation of macro-financial assistance to Ukraine worth EUR 18 billion next year. They also opened a debate on the European Commission’s report on a possible revision of European fiscal rules and adopted a joint declaration calling on the European Parliament to reduce staff spending.
“It is no secret that the approval of EUR 18 billion in new assistance to Ukraine for next year, the Hungarian national recovery and resilience plan, Pillar Two of the OECD agreement and minimum corporate tax rates are linked. They are a package dependent on how Hungary continues in its reforms in the field of public procurement control,” said Minister of Finance Zbyněk Stanjura.
A European Commission report of 30 November assessed Hungary’s progress in adopting legislation to protect funds from EU budgets. In it, although the Commission proposed blocking Hungary’s access to EU structural funds of EUR 7.5 billion due to insufficient reforms, it concurrently approved the Hungarian recovery and resilience plan of EUR 5.8 billion. However, the Commission made the disbursement conditional on the continuation of introducing reforms in this area.
“I am aware of the ongoing reform process in Hungary, which is evolving on a daily basis, and this is why we called the Commission to update its assessment today. Hungary is ready to fully cooperate in this task. The goal is to find a compromise based on the updated report within only a few days,” Zbyněk Stanjura explained, adding: “After that it is already a procedural matter, and we will probably convene an extraordinary Ecofin videoconference and approve the entire package of measures by the end of the year.”
The finance ministers today approved an amendment to the financial regulation based on which the European Commission may commence steps leading to securing EUR 18 billion for Ukraine. “Our priority remains providing Ukraine with this money at the start of January. I think that the credibility and reputation of the whole of the Union depends on this, and that we cannot afford further procrastination,” Zbyněk Stanjura emphasised.
The finance ministers also discussed a revision of the Energy Taxation Directive. The majority of Member States supported the direction given by the Czech Presidency comprising greater flexibility to reflect the national specifics of taxation systems. “For the CR it is crucial to incorporate adequately long transition periods to achieve the set environmental goals, which will provide sufficient time for our business sector to adapt to the new tax rules,” Zbyněk Stanjura said.
The debate from the informal ECOFIN meeting in Prague regarding the revision of fiscal rules based on the European Commission economic governance review also continued. “The escape clause from the Stability and Growth Pact will be extended for the third year. This means that nobody has to comply with the European rules and that nobody checks they are being observed. Yet it is not enough to blame the crisis because we have been going through a crisis for the last 13 years. The result is a dramatic deepening of public debts in the EU, which we cannot continue to ignore,” Zbyněk Stanjura said, adding: “After the end of our Presidency, I will support our Swedish colleagues in seeking an agreement, as soon as possible, on new fiscal rules that will be transparent, binding and, above all, enforceable.”
The finance ministers ended by adopting a declaration in which the EU Member States called on the European Parliament to reduce staff expenditure in the coming years. “With the current growing pressure to make savings across expenditure, I consider it essential that EU institutions also tighten their belts and that, in particular, the European Parliament reduces its non-essential staff costs to the bare minimum,” Zbyněk Stanjura concluded.