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Brussels, 13 November 2013
Preparation of Economic and Finance Ministers Council, Brussels, 15 November
The EU's Council of Economic and Finance (ECOFIN) Ministers will take place in Brussels on 15 November at 10.30. The European Commission will be represented by Olli Rehn, Vice President and Commissioner for Economic and Monetary Affairs and the Euro and Michel Barnier, Commissioner for Internal Market and Services, and Algirdas Šemeta, Commissioner for Taxation and Customs Union, Audit and Anti-fraud. A press conference is expected to take place after the meeting.
Responding to the call of the May European Council, the proposal to amend the Savings Tax Directive will be tabled at the ECOFIN Council in order to reach political agreement. The proposal is aimed at closing loopholes and improving the functioning of the current legislation.
Since 2005, the Savings Directive ensures that paying agents report interest income received by taxpayers resident in other EU Member States. Three Member States were allowed to levy a transitional withholding tax on such interest income (Belgium has moved towards automatic exchange of information as of 1 January 2010 and Luxembourg has announced its intention to do the same as of 1 January 2015).
In November 2008, the Commission proposed to improve the Directive, so as to better ensure the taxation of interest payments which are channelled through intermediate tax-exempted structures (trusts, foundations…) (see IP/08/1697). The Commission also proposed to extend the scope of the Directive to income equivalent to interest obtained through investments in certain innovative financial products as well as in certain pension and life insurances products.
This measure is one of the key actions of the Commission's plan to fight against tax fraud and evasion of 6 December 2012 (see IP/12/1325).
Standard VAT declaration (ET)
Commissioner Šemeta will present the Commission's proposal for a standard VAT declaration for all Member States (see IP/13/988). The objective of this proposal is to reduce red-tape for businesses, ease tax compliance and make tax administrations across the Union more efficient. It could save EU businesses up to €15 billion each year. The proposal foresees a uniform set of requirements for businesses when filing their VAT returns, regardless of the Member State in which they do it. The standard VAT return – which will replace national VAT returns – will ensure that businesses are asked for the same basic information, within the same deadlines, across the EU.
The proposal fully reflects the Commission's commitment to smart regulation and is one of the initiatives set out in the recent REFIT (Regulatory Fitness and performance Programme) to simplify rules and reduce administrative burdens for businesses (see IP/13/891). This proposal is one of the measures to make VAT more efficient and business friendly announced in the Communication on the future of VAT (see IP/11/1508).
Revision of the Anti-Money Laundering Directive (CH)
On 5 February 2013, the Commission adopted the proposal for a fourth Anti-Money Laundering Directive in order to update the current framework, adapt it to emerging threats and reflect the revision of the international standards by the Financial Action Task Force.
Good progress has been made in the negotiations so far. The following big issues are still up for debate:
The Commission welcomes the decision of the Lithuanian Presidency to bring these issues on the agenda of the Council. This provides the opportunity to have an exchange of views on important policy questions and to provide political guidance for further discussions.
Single Resolution Mechanism: first reading (CH)
Last month, the Council gave the final green light to the Single Supervisory Mechanism (IP/12/953), the first leg of our Banking Union, which fully entrusts the European Central Bank (ECB) with the direct supervision of banks in the euro area.
Supervision alone tough is not enough. A banking union also requires action to restructure non-viable banks when necessary.
That is why the supervisory system needs to be complemented by an integrated European resolution system for all countries participating in the banking union.
That is why the European Commission has proposed a Single Resolution Mechanism (SRM) for the Banking Union on 10 July 2013 (IP/13/674), which includes a single resolution board and a single resolution fund so we can tackle future bank crisis efficiently with minimal costs to taxpayers and the economy.
The SRM will basically apply the substantive rules of the draft Bank Recovery and Resolution Directive (see IP/12/570 and MEMO/12/416) in a coherent and centralised way ensuring consistent decisions for the resolution of banks.
During the upcoming ECOFIN, the Lithuanian Presidency will inform the Member States about the latest state of play regarding the proposal and will assess the pending issues that need to be further discussed in order to reach an agreement among Member States before the end of 2013, in line with the conclusions of the European Council.
Commissioner Barnier welcomes the efforts of the Lithuanian Presidency to achieve rapid agreement on the SRM proposal and supports the latest compromise put forward as a good basis for discussions. He welcomes Member States' overall support for an effective resolution mechanism for the Banking Union and looks forward to constructive and detailed on Friday.
Report from Special Advisor Philippe Maystadt on the EU's contribution to international accounting standards (CH)
In April, Commissioner Barnier appointed Philippe Maystadt as a special advisor with a view to strengthening the European contribution to the International Financial Reporting Standards (IFRS) setting process. In particular, Philippe Maystadt was asked to review the current system of adoption of IFRS in the EU, including the governance system and the operations of EFRAG (European Financial Reporting Advisory Group) and ARC (Accounting Regulatory Committee) as well as the communication between with the IASB International Accounting Standards Board).
Commissioner Barnier mandated this mission as a follow up of the ECOFIN Council of November 2012, where Ministers asked for stronger EU influence in the development of international accounting standards, for an increased legitimacy of EFRAG and for a reinforced role of ARC. This mission is part of a wider workstream on accounting standards, including an evaluation of the IAS (International accounting Standards) Regulation of 2002, which the Commission intends to complete by the end of 2014.
During the upcoming ECOFIN Council, Philippe Maystadt will present his recommendations to the Ministers (see IP/13/1065). The Lithuanian Presidency is due to ask Ministers to provide the necessary mandate in order to proceed with the implementation of the recommendations in the report
Commissioner Barnier welcomes the excellent work done by Mr Maystadt and hopes Ministers will endorse its main recommendations.
Banking Union: state of play (CH)
Uncoordinated national responses to the failure of banks have reinforced the link between banks and sovereigns and led to a worrying fragmentation of the Single Market in lending and funding. This fragmentation is particularly damaging within the euro area, where monetary policy transmission is impaired and the ring-fencing of funding impedes efficient lending to the real economy and thus growth.
Swift progress towards a Banking Union, comprising single centralised mechanisms for the supervision and restructuring of banks, is indispensable to ensure financial stability and growth in the euro area.
Building on the strong regulatory framework common to the 28 members of the Single Market (single rulebook), the European Commission has therefore taken an inclusive approach. The Banking Union brings together the 17 Member States (18 next year) currently within the euro area and remains potentially open to all Member States at a later stage.
During the upcoming ECOFIN, the Lithuanian Presidency will inform about the latest state of play regarding the proposals on which the banking union is building. It includes:
The Presidency will also assess where the work should focus in order to reach final agreement between Member States before and the European Parliament before the end of 2013, in line with the conclusions of the European Council.
Commissioner Barnier welcomes the efforts of the Lithuanian Presidency to achieve rapid agreement on these proposals. He will recall that the Commission’s proposals would provide for an effective resolution mechanism for the Banking Union, and looks forward to constructive discussions with Member States to address where compromises on aspects of the proposal could be found.
Annual statistical package (ET)
The statistical package provides information about the state of EU statistics and the main issues in Autumn 2013.
The Commission has continued to strengthen the governance of the European Statistical System both at the European and national levels via proposed amendments of Regulation on European statistics, via the implementation of the Commission decision on Eurostat and via a Memorandum of Understanding between the European Statistical System and the European System of Central Banks.
In order to modernise the production of EU statistics, as described in its Communication, the Commission has initiated a long term programme based on a set of interdependent projects.
The Commission has also further enhanced the quality assurance framework for statistics used in EU economic governance. It includes the adoption, on 7 June 2013, of a Proposal for a Regulation of the European Parliament and of the Council on the provision and quality of statistics for the macroeconomic imbalances procedure; continued implementation of strengthened verification procedures in the area of government finance statistics; and further improvements in availability and quality of the principal European economic indicators.
The ECOFIN breakfast will focus on the current economic outlook based on recent economic forecasts.