12th Nov 2019


Tax evasion on the agenda this WEEK

Tax havens and banking transparency top this week’s agenda as EU finance ministers meet to discuss the issue on Tuesday (14 May).

The ministers are set to adopt a mandate enabling the European Commission to negotiate amendments to agreements signed in 2004 with Switzerland, Liechtenstein, Monaco, Andorra and San Marino on the taxation of savings income.

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  • Tax evasion costs the EU almost €1 trillion every year in lost revenue, says the European Commission. (Photo: Chris Tolworthy)

The mandate is in preparation of the EU summit at the end of the month where member states are set to agree draft EU legislation to strengthen rules on taxing savings.

The automatic exchange of information has been the EU standard since 2005 for savings income.

Luxembourg and Austria have held out against automatic exchange but both are now more open to the idea following German pressure.

The commission estimates tens of billions of euros are stashed away in offshore accounts.

“Decisive action to minimise tax fraud and tax evasion could generate billions in extra a revenue for public budgets across Europe,” the European Commission said in a position paper ahead of the summit.

The UK-based ActionAid over the weekend revealed the results of research that tracked the offshore structures of the FTSE100 - the London Stock Exchange.

It found that 98 of the 100 FTSE100 multinational groups have companies in tax havens. The NGO says banks remain the most prolific users of tax havens.

On Monday, eurozone finance ministers are to agree on paying the next bailout tranches to Cyprus and Greece. Portugal also hopes to get a €2 billion bailout tranche after having agreed over the week-end on new austerity measures to replace the ones rejected by the Portuguese Constitutional Court.

Discussions on Slovenia may also take place, despite Ljubljana's insistence it can solve its banking problems without a bailout.

Finance ministers will also discuss a commission proposal on bank recovery and resolution. The proposal was put forward last June.

The draft directive would give national authorities the tools to prevent a bank crisis and resolve any financial institution in an “orderly manner” in case it fails.

The commission says the proposal will divert the bailout burden of banks away from the taxpayer.

Wednesday will see French president Francois Hollande in Brussels to meet commission chief Jose Manuel Barroso - Hollande is under increasing Brussels pressure to make structural changes to bring down the country's budget deficit.

A high-level international donor conference on Mali is also scheduled for Wednesday. Both Hollande and Barroso, along with several heads of government from the region, will attend the conference.

“It will mobilise and coordinate support from the whole international community for Mali’s development,” said commission spokeswoman Pia Ahrenkilde Hansen.

EU economic forecasts out next WEEK

The European Commission will next Friday unveil its latest forecast for economic growth and employment in EU countries.

Brexit delay rolls into This WEEK

Westminster will vote on a possible election, while EU ambassadors will reconvene to decide on the length of a Brexit extension. The awkward Brexit tango continues.

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