The December Ecofin Council meeting was devoted to responding to the economic slowdown, preparing the European Council meeting, strengthening financial stability and addressing various tax issues.

The European Union's twenty-seven economy and finance ministers met with the European Commission and the European Central Bank on 2 December for the Ecofin Council. It was preceded by the 1 December meeting of the Eurogroup.

During its October meeting, the European Council had mandated the Commission and the Ecofin Council to prepare a European strategy to cope with the economic slowdown to submit to the next European Council meeting on 11 and 12 December. This strategy was to be founded on the Lisbon Strategy and the Stability and Growth Pact.

On the basis of the 26 November communication from the Commission on a "European Recovery Plan", the ministers adopted a European strategy in the form of a common "toolkit" of Community instruments (resources from the EIB and the EU budget), allowing each Member State to take the necessary steps, based on its particular financial and macro-economic situation.

The Heads of State and Government of the G20 had asked the finance ministers to make recommendations for implementing the principles and decisions adopted at the Washington summit of 15 November. To this end, on 2 December the Ecofin Council began to draw up a set of European-level proposals.

The ministers assessed the progress made in implementing the roadmaps for financial stability, and decided on a general direction for amendments to three directives that are directly linked to the response to the financial crisis:

- The Capital Requirements Directive. This directive should lead to progress in five areas – increased supervision of cross-border groups, tighter control over securitisation, tighter control over exposure to a single counterparty, tighter control over liquidity risk and a uniform definition of bank capital.

- The Directive on Deposit Guarantee Schemes, which is an extension of the conclusions of the October Ecofin Council. The proposed amendments concern a harmonised level of coverage for savings, to be set at €100,000 by 31 December 2011, and a shorter payout deadline of 20 working days (with a possible extension to 30 days), compared with the previous deadline of three months.

- The Solvency II Directive, aimed at modernising the prudential rules applicable to insurance firms, particularly taking into account their financial situation.

The Council also followed up on the emergency measures taken in recent weeks to maintain the solidity of the banking system.

In terms of financial services, the ministers also decided on a general orientation for amendments to the UCITS Directive (Undertakings for Collective Investment in Transferable Securities), whose goal is to modernise the regulatory framework for investment funds. The introduction of a "European passport" for fund management firms will help improve the integration of the European market for asset management.

Finally, the Ecofin Council dealt with tax matters, reduced-rate VAT, taxation of savings income and a code of conduct for business taxation.

ECOFIN Council agreement on four key directives for financial stability: the strengthening of bank deposit guarantee systems; the increase of banking capital requirements; the overhaul of the regulatory framework of UCITS (Undertakings for Collective Investment in Transferable Securities); the continuing integration of insurance activities. With this agreement, the French Presidency has met its ambitious legislative targets designed to bolster the solidity and stability of the European financial system.