Main results of the EU Economic and Financial Affairs Council, 11 March 2025

Thank you. Good afternoon everyone.

As already mentioned, the first important discussion we had today was on increasing defence spending at EU and national levels.

As you know, following up on our ReArm Europe plan and the recent special European Council, the Commission is working intensively on a set of proposals to be presented shortly.

Amongst others, the Commission will soon propose the coordinated activation of the national escape clause.

Today’s meeting was a good opportunity to gather first feedback from EU Member States on this initiative.

There was a broad support for a coordinated activation of the national escape clause.

Many Member States emphasised that activation should be targeted and temporary.

It should allow Member States to transition to a structurally higher level of defence expenditure, while having fiscal sustainability considerations in mind.

On the definition of defence spending, there appears to be several advantages for using the already established definition of defence expenditure, or the so-called broad COFOG definition.

This provides for a scope broadly in line with the NATO definition of defence spending, and will allow us to move fast, using a concept that has a solid statistical basis.

We also took note of requests by several Member States to take into consideration the specificities of those Member States that already have high defence spending.

This discussion was very useful, as we will be able to take this into account before tabling the Commission’s proposal, possibly already next week.

We also held our regular exchange on developments related to Russia’s full-scale aggression against Ukraine.

The EU will continue to provide Ukraine with regular and predictable financial support.

This year, the EU is already mobilised to provide €30.6 billion in financing to Ukraine.

The Commission stands ready to frontload financing under these instruments if that would be required by Ukraine’s financing needs.

In total, €135 billion in assistance has been provided by the EU to Ukraine.

That is more than any other of its international partners.

Today, we also heard a strong support from Ministers for strengthening the enforcement of sanctions and avoiding their circumvention, in particular via sharing information amongst Member States.

For example, better coordination of data exchange and the use of AI could be of great use for our Custom Authorities.

Overall, the message is clear: The EU’s commitment to Ukraine is, and will remain, steadfast.

Moving to simplification.

Europe’s security also depends on having a strong and competitive economic base.

Cutting red tape is an important element to achieve a more competitive Europe.

Today’s meeting provided me with an opportunity to present our first Omnibus proposals to simplify EU rules.

These proposals include, briefly:

a “stop-the-clock” proposal to delay by two years the application of the Corporate Sustainability Reporting Directive (CSRD) for companies that have not yet started reporting and a 1-year delay for the transposition and application of the Corporate Sustainability Due Diligence Directive (CSDDD).

on substance of the package, it foresees freeing around 80% of companies currently under the scope of the CSRD from very burdensome reporting requirements.

making Taxonomy reporting more proportionate by limiting mandatory reporting only to very large companies.

a major simplification to the Carbon Border Adjustment Mechanism (CBAM) that limits obligations for approximately 182,000 or 90% of importers, most of them SMEs.

protection for smaller companies, and in particular SMEs, from being indirectly impacted by reporting and due diligence requirements, addressing the so-called “trickle down” effect.

In any case, these proposals are the first part of our simplification agenda.

We will continue this work over the course of the entire mandate.

Already, in the coming months, we will come with the next proposals.

Overall, there was broad support for the first simplification proposals from Ministers, and I look forward to working with Member States to improve and enact the first two packages as soon as possible.

I also provided our regular update on progress with the implementation of NextGenerationEU and the Recovery and Resilience Facility.

The Commission is currently assessing 23 payment requests amounting to a total of €68.4 billion, covering 806 milestones and targets.

My main message today is that the clock is ticking.

The legal deadline provides that all milestones and targets must be met by the end of August 2026.

This means that we have only 18 months left to submit all outstanding payment requests and supporting evidence.

This also means that Member States need to carefully reconsider the content of their plans to make sure that they are able to submit their remaining payment requests well on time.

The implications are clear: any measures that Member States cannot complete by August 2026 should be removed from the plans and replaced with alternative measures that can be delivered on time and can deliver, obviously on the RRF objectives.

Finally, I would like to welcome today’s endorsement of the targeted revision of the Belgian and Irish plans.

Thank you.