VILNIUS - Lithuanian Finance Minister Rimantas Sadzius at the ECOFIN meeting on June 21 in Luxembourg urged the EU finance ministers to agree as soon as possible on the legislative proposal on banking recovery and resolution, reported the Web site eu2013.lt. “Many efforts have already been put in to secure that the resolution of banks encountering problems would be financed by this sector rather than by taxpayers and establish a mechanism which would function effectively in case credit institutions encounter serious difficulties,” said Sadzius after the meeting.
The directive, proposed last year by the European Commission, aims at embedding new preventive, early intervention and resolution tools, designating national resolution authorities, and establishing resolution funds funded by the financial industry. The initiative is closely related to the development of the Banking Union, a priority for the incoming Lithuanian Presidency of the EU Council.
“The Directive, together with the foreseen establishment of further elements of the Banking Union, is to become an important tool to secure financial stability in the whole of Europe,” said Minister Sadzius.
The discussions were postponed until June 26. Once agreement is reached, the Lithuanian Presidency of the EU Council will aim for a constructive and efficient work stream on this dossier.
ECOFIN has also approved European Commission recommendations for the EU member states in accordance with their submitted National Reform, Stability or Convergence Programs as part of the European semester of economic and financial policy coordination.
To secure long-term financial sustainability, member states are urged to implement further fiscal consolidation and undertake specific reforms that would restore economic growth. The recommendations also focus on the importance of securing labor market flexibility, the necessity to increase employment, especially for youth, and the need to actively reform pension systems.
The recommendations for Lithuania in 2013-2014 include the need to secure fiscal consolidation for economic growth and the budget strategy planned for implementation, revise some elements of the tax system, continue work on pension reform, reduce social exclusion, promote measures improving energy efficiency of buildings, and finalize the reform of state-owned enterprises.
ECOFIN has also adopted the Commission recommendation to end the excessive deficit procedure for Lithuania, initiated in 2009.
“This is very good news. It proves that Lithuania is reliable and disciplined, a country that investors can trust,” said Sadzius.
The ministers have also approved the recommendation on Latvia’s accession to the euro area from Jan. 1, 2014.
“We congratulate our neighbors on this success. It encourages us to be more persistent in pursuing our goal to adopt the euro in Lithuania a year later. Once all three Baltic States become euro area countries, the entire region will become more attractive to investors,” said the Lithuanian finance minister.
Sadzius will chair the ECOFIN meetings after Lithuania takes over the Presidency of the EU Council on July 1. The first meeting will take place in Brussels on July 9.