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European Commission - Speech - [Check Against Delivery]

Readout from the College Meeting: Remarks by Vice-President Dombrovskis

Brussels, 27 January 2016

Good afternoon, 

Sorry to keep you waiting. The College meeting took longer than expected. We discussed a number of issues, amongst others, the situation in the Schengen area, the European Pillar of Social Rights and our ambition to fight tax avoidance.     


Schengen

Europe is facing unprecedented challenges in terms of the migration crisis and its implications on the Schengen area. Schengen is one of the most formidable achievements of the European Union, and it must be protected.

This week, Member States asked the Commission to lay the groundwork that would allow Member States to prolong temporary border controls to up to two years, in line with existing Schengen regulations.The College had a long discussion on this issue just now.

We specifically discussed the draft Schengen evaluation Report on Greece, which is based on the evaluation visit that took place in November. The draft report concludes that Greece is seriously neglecting its obligations. There are serious deficiencies in the carrying out of external border controls that must be overcome and dealt with by the Greek authorities. 

Since November Greece has started work towards complying with the Schengen rules, but more needs to be done to ensure the proper management of our external borders. This includes proper reception, registration, relocation or return of migrants in order to bring Schengen's functioning back to normal. The Commission is supporting and helping Greece and other countries in whatever way we can. 

The next step now is for this draft report to be discussed and adopted by the Schengen evaluation committee of Member States, acting by qualified majority.

 

Strengthening the economy

For Europe to withstand the refugee crisis we need solidarity and a coordinated European response. But we also need strong economy. 

This is why we have to now continue in earnest to strengthen Europe's Economic and Monetary Union. This cannot be postponed to a later date. We should use this moment of the modest economic recovery in Europe to address structural weaknesses in our economies, and to make our economies more resilient. 

 

Italian banks

In this context, the College welcomed the agreement reached last night between Commissioner Vestager and Minister Padoan on the terms of the guarantee scheme to encourage Italian banks in dealing with their non-performing loans. 

The guarantees are to be priced at market terms, so they do not constitute state aid.

This is an important step. Together with other reforms undertaken and planned by the Italian authorities, it should further improve the ability of banks to lend to the real economy and drive economic growth.

 

European Pillar of Social Rights 

We should also use the recovery in Europe to remedy social problems coming from the crisis: poverty, social exclusion, inequalities and high unemployment. In this respect, today the College discussed the European Pillar of Social Rights. 

This a cornerstone of the Commission's ambition to power convergence – to bring our economies and social standards closer together, and closer to the best performers.This idea of re-launching the convergence, which stalled during the crisis, is at the centre of our ongoing work to strengthen Europe's Economic and Monetary Union.

The European Pillar of Social Rights it is also about updating the social acquis – the combination of all instruments at EU level to address social concerns. The Social Pillar should be a self-standing reference point, of a legal nature, setting out key principles and values shared at EU level. 

We plan to launch a broad consultation to identify the right areas of action to be taken at the right level. We look forward to active participation in this consultation, particularly by social partners.


Corporate Tax Package

Finally, a few words on the Corporate Tax Package, which was also subject to discussion in College today and will be presented by Pierre Moscovici tomorrow, following conclusion of the written procedure.

Governments and public budgets lose out on billions of euros each year because of tax avoidance. Some recent studies estimate revenue lost in the EU to be around EUR 50-70 billion a year. This is roughly equivalent to more than  5 times the EU Erasmus+ budget and more than 5 times the total EU funding available for the refugee crisis in 2015- 2016.  We are talking about serious amounts of money that public budgets are losing out on.

The College agreed today that our proposals have to implement international standards developed by the OECD quickly – even going beyond the OECD Base Erosion and Profit Shifting agreement. 

With tomorrow's package we are moving to implementation and hard law. The aim of the package is to effectively close loopholes used by some companies and to strengthen administrative cooperation among Member States.

SPEECH/16/176


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