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European Commission - Speech - [Check Against Delivery]

Remarks by Vice-President Dombrovskis at the ECOFIN press conference

Brussels, 8 December 2015

Thank you Minister Gramegna,

I would like to first congratulate Minister Gramegna and the Luxembourg Presidency for their tireless work, professionalism and commitment in steering the Council over the past six months. It has been a very successful and productive Presidency.


AGS

Today's discussion covered a number of issues, including the launch of the new European Semester. I am pleased at today's broad agreement on the priorities of our Annual Growth Survey. We are building on:

  • Boosting investment;
  • Carrying out structural reforms that can enhance competitiveness and open up job opportunities; and
  • Pursuing fiscally-responsible policies.

There are still major differences in economic and social levels among and between Member States. We are working to bridge that divide.

The Annual Growth Survey is therefore about strengthening the economic recovery and supporting the process of convergence, both within and among EU Member States, and moving closer to the best performers.


Taxation

I will just make some comments on the many taxation files covered today.

First, we note that Ministers of 10 Member States have now agreed in principle on the key parameters of a Financial Transaction Tax for participating Member States.

The remaining details will be worked on by the participating Member States before the summer.

The Commission will help translate this agreement into a legal text.

Rest assured, the Commission will do everything necessary to ensure that the FTT respects European and international law, including the rights of non-participating Member States, and is consistent with other initiatives launched by the Commission, such as the Capital Markets Union.

The fight against fraud and tax evasion has taken centre stage in our taxation policy.

The Commission has already taken steps which, in turn, strengthen confidence in the entire taxation system.

Companies must pay their fair share of taxes, where they make profits, where they make real economic activity. The Commission set out a clear agenda to introduce more fairness and transparency in business taxation in the Action Plan on Corporate Taxation of last June.

I am pleased to see that, today, the Council took a clear position on:

  • Quick and coherent implementation of OECD actions against Base Erosion and Profit Shifting, and
  • A renewed mandate for the Code of Conduct Group to examine specific tax practices.

The Commission will now follow this up in earnest.

We intend to present early next year a package that includes a series of legislative and non-legislative measures to implement coordinated control measures against tax optimization.

Europe needs to be at the forefront of implementing the agreed OECD measures.

But we need to avoid a situation where 28 Member States do this with 28 different systems. There needs to be a coordinated European approach.

This package will also cover non-EU countries to encourage good governance on tax measures.

I look forward to working with the Dutch Presidency to move this package forward.

We welcome further progress made today on the Banking Union.

A critical mass of Member States has now ratified the Intergovernmental Agreement. This will enable mutualisation of contributions to the Single Resolution Fund.

Agreement has also been reached today on bridge financing arrangements to the Single Resolution Fund.

As a result, the Single Resolution Fund will be up and running from 1 January, as planned, and its credibility will be backed by sufficient financial resources from the start.

At the end of the day, this is needed to protect taxpayers from having to foot the bill for the mistakes of the banking sector.

I am pleased that yesterday Greece was the latest Member State to ratify the Intergovernmental Agreement for the Single Resolution Mechanism.

And just today, Lithuania has informed us of its transposition of Deposit Guarantee Schemes Directive.

Our first priority is for Member States to implement what was agreed on Banking Union.

This is also the key principle of the Commission proposals for a European Deposit Insurance Scheme and further measures to reduce risk and break the link between banks and public finances.

Together with Commissioner Hill, I gave a presentation to Ministers on this. Our proposal on a European Deposit Insurance Scheme offers a balanced approach.

  • Risk reduction has to go hand-in-hand with risk sharing.
  • Implementation of the agreed rules to build up national funds is a precondition for accessing a European-wide scheme.

We are, as always, ready to engage in constructive discussions with Member States on a comprehensive package to complete the Banking Union. This is essential for a resilient and prosperous economic and monetary union.

 

Terrorism Financing

The recent horrific terrorist attacks in Paris have again reminded us of the need to act on all fronts to prevent future atrocities.

Ministers agreed to work on fighting terrorism financing as an absolute priority.

The Commission today set out options. This includes blocking hard-to-trace financing sources, such as:

  • Illicit movements of cash, increasingly through systems that allow virtual currencies to be exchanged for real money anonymously.
  • Extra checks on the purchase and distribution of prepaid cards.
  • More vigilant registering of bank accounts and freezing assets.
  • Better information sharing on financial intelligence.

This is part of a wider security package presented by the Commission last week to step up the fight against terrorism and organised crime.

A first step is the quick transposition by Member States of the 4th Anti-Money Laundering Directive, which provides many safeguards to prevent untraceable money transfers.

Clearly, more needs to be done. Time and effectiveness is of the essence.

The Commission will flesh out detailed suggestions on the basis of today's discussion.

 

Flexibility in the Stability and Growth Pact

Finally, I welcome today's commonly-agreed position on the flexibility that exists within the Stability and Growth Pact.

The position is compatible with the letter and the spirit of the Commission's Communication on Flexibility in the SGP which we presented in January.

Today's agreement shows that applying the rules in a way that creates a positive link between fiscal sustainability, structural reforms and investment remains the guiding principle.

 

Thank you.

SPEECH/15/6277

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