Det Udenrigspolitiske Nævn 2011-12
UPN Alm.del Bilag 21
Offentligt
Brussels, 26 October 2011
STATEMENT OF EU HEADS OF STATE OR GOVERNMENT
At today's meeting, in line with paragraph 7 of the European Council conclusions of 23 Octoberconcerning relations between the EU and the Euro area, the members of the European Councilwere informed by President Van Rompuy about the state of preparations of the Euro Summit thatwill take place later in the day
They discussed the situation and underlined their common resolve to do their utmost to overcomethe crisis and to help face in a spirit of solidarity the challenges confronting the European Unionand the Euro area.
They welcomed the consensus on measures to restore confidence in the banking sector reached bythe Council (ECOFIN) on 22 October. On this basis, they agreed the text annexed to this statementsubject to agreement on the measures indicated in this text forming part of a broader package,including the decisions to be taken by today's meeting of the Euro Summit. The Council (ECOFIN)will finalise the work and adopt the necessary follow up measures.
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ANNEX
Consensus on banking package
1.
Measures for restoring confidence in the banking sector (banking package) are urgentlyneeded and are necessary in the context of strengthening prudential control of the EU bankingsector. These measures should address:a.The need to ensure the medium-term funding of banks, in order to avoid a credit crunchand to safeguard the flow of credit to the real economy, and to coordinate measures toachieve this.b.The need to enhance the quality and quantity of capital of banks to withstand shocksand to demonstrate this enhancement in a reliable and harmonised way.
Term funding2.Guarantees on bank liabilities would be required to provide more direct support for banks inaccessing term funding (short-term funding being available at the ECB and relevant nationalcentral banks), where appropriate. This is also an essential part of the strategy to limitdeleveraging actions.3.A simple repetition of the 2008 experience with full national discretion in the setting-up ofliquidity schemes may not provide a satisfactory solution under current market conditions.Therefore a truly coordinated approach at EU-level is needed regarding entry criteria, pricingand conditions. The Commission should urgently explore together with the EBA, EIB, ECBthe options for achieving this objective and report to the EFC.
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Capitalisation of banks4.Capital target:There is broad agreement on requiring a significantly higher capital ratio of9 % of the highest quality capital and after accounting for market valuation of sovereign debtexposures, both as of 30 September 2011, to create a temporary buffer, which is justified bythe exceptional circumstances. This quantitative capital target will have to be attained by 30June 2012, based on plans agreed with national supervisors and coordinated by EBA. Thisprudent valuation would not affect the relevant financial reporting rules. National supervisoryauthorities, under the auspices of the EBA, must ensure that banks’ plans to strengthen capitaldo not lead to excessive deleveraging, including maintaining the credit flow to the realeconomy and taking into account current exposure levels of the group including theirsubsidiaries in all Member States, cognisant of the need to avoid undue pressure on creditextension in host countries or on sovereign debt markets.5.Financing of capital increase:Banks should first use private sources of capital, includingthrough restructuring and conversion of debt to equity instruments. Banks should be subject toconstraints regarding the distribution of dividends and bonus payments until the target hasbeen attained. If necessary, national governments should provide support , and if this supportis not available, recapitalisation should be funded via a loan from the EFSF in the case ofEurozone countries.State Aid6.Any form of public support, whether at a national or EU-level, will be subject to theconditionality of the current special state aid crisis framework, which the Commission hasindicated will be applied with the necessary proportionality in view of the systemic characterof the crisis.
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