Since the meeting of the heads of state and government of the European Union at the end of October in Brussels, the EU politicians in charge of finance and economic affairs did not have a chance to relax. Under pressure from Germany and with the support of France it has been decided that the EUR 750 billion bailout plan for EU countries in financial difficulties, which is currently limited until 2013, will only be extended if changes are made to the Treaty of Lisbon. The main demand of the Germans: in future, countries of the Euro Zone will also be subject to a kind of "Insolvency regulation". Concrete consequence: creditors of Euro countries, who are no longer able to meet their financial obligations, will get a haircut, which means they have to forego part of their claims.
 
The announcement of this intention immediately led to a rise in interest rates for government bonds of potential Euro problem children, in particular Ireland and Portugal, and to new fears that the entire Euro Zone might suffer an attack of weakness. Hence, the resistance of these countries, but also of Spain, to involve private creditors (banks and other financial investors) in the costs of public sector budget crises, is great. At the same time, Ireland, which has come under massive pressure of "the financial markets", tried until the very last to avoid not having to resort to accepting funds from the Euro bailout plan, with negative effects on the entire Euro area. Informed circles report that the Irish would worry that the EU and the International Monetary Fund could ask them to raise the ridiculously low tax rate for enterprises of 12.5 percent, which was a major contributor to the fact that enterprises were attracted to the green island.

Further items on the agenda of the finance ministers: all work of the group under Herman Van Rompuy on the future of Economic Governance (Stability and Growth Pact) shall be completed by summer 2011. The finance politicians also discussed bank levies and the Financial Transaction Tax. They expressed their concern that the bank levies, which had been introduced in some Member States, could lead to distortions of competition in the internal market. Experts are expected to present a relevant report before the beginning of December. The taxation of the financial sector in form of a Financial Transaction Tax or a slimmed down version thereof, the Financial Activity Tax, shall also be continued to be reviewed, however without time horizon.

Also interesting in this context was another point on the ECOFIN agenda, namely the exemption from Value Added Tax for financial services. It is a well-known fact that financial products, due to EU exemptions belong to the few products, which are not subject to Value Added Tax, in spite of the fact that they have crossed the trillion landmark by now. Here, the finance ministers, together with the Commission want to at least consider whether this unique exception should not be abandoned.