Today, EU finance ministers are meeting in Luxembourg to discuss a number of important issues, including the climate, financial supervision and how the public finances are to be brought back into balance (the 'financial exit strategy').

Finding common ground for future decision on climate financing

To pave the way for a successful climate agreement in Copenhagen, the ministers must continue the discussion on how much the EU should contribute to financing measures against climate change. The finance ministers will discuss the scale of the financial need and what principles are reasonable for dividing the burden of public financing. Other questions concern the extent to which different sources of financing can contribute and how a decentralised system of governance for climate financing can be designed.

The intention is to create common ground for a future decision. To complement the Environment Council’s conclusions on the climate, the ECOFIN Council will adopt conclusions on the financing of climate measures. On the basis of both Councils’ conclusions, the EU position ahead of Copenhagen will then be discussed and determined by the European Council on 29–30 October.

New structures will improve the financial supervision

The finance ministers will also continue their work on improving financial supervision in the EU. Two new structures are to be established to develop and coordinate supervision in the EU: the European Systemic Risk Board (ESRB) for ‘macro-prudential supervision’ and the European System of Financial Supervisors (ESFS) for ‘micro-prudential supervision’.

At this meeting, the ministers will mainly discuss the establishment of the ESRB. The ESRB will primarily consist of representatives of the Member States’ central banks and supervisory authorities. They will analyse information at an overarching level and pay attention to tendencies and circumstances that may affect financial stability. If financial stability comes under threat, the ESRB will be able to issue warnings and recommend action.

The Presidency will also report on the state of negotiations on the micro-prudential area and a European System of Financial Supervisors (ESFS).

Continued work on exit strategy

The economic crisis and the very extensive financial policy measures that have been taken have put great pressure on the public finances. Based on the discussion that took place at the informal meeting of finance ministers in Göteborg, the Council will agree on conclusions on how the public finances are to be brought back into balance in the longer term – a financial exit strategy. The ministers agreed at that time on a number of building blocks that should be included in the strategy.

EU position ahead of the G20 summit, another item on the agenda

Other items on the agenda include a common EU position ahead of the meeting of G20 finance ministers on 6–7 November, continued work on a more effective framework for crisis management in the EU and an agreement on anti-fraud agreements with third countries.