Meeting on 9 December in Brussels, EU finance ministers gave their broad support to the Commission’s recently announced €315 billion investment plan. They also approved two measures for combating tax fraud and tax avoidance, and agreed on the calculation of the contributions to the single resolution fund.
Investment plan for Europe
The Council heard a presentation by the Commission and the European Investment Bank (EIB) on the work of a task force, established in the autumn to identify possible investment projects.
The Commission’s €315 billion investment plan, which was unveiled in November, foresees the creation of a new European fund for strategic investment within the EIB group in the spring of 2015. The fund will be built on a €16 billion guarantee from the EU budget and €5 billion from the EIB.
The fund aims to provide risk-bearing capacity that can unlock investments and to back risk finance for SMEs.
The finance ministers expressed broad support for the investment plan. The Council looks forward to a legislative proposal that would give substance to this plan.
The European Council, meeting on 18-19 December, will be called to endorse it.
The Italian Presidency of the Council will send to the president of the European Council a summary of this discussion.
The Commission is expected to submit a legislative proposal in January 2015. The aim is to have it adopted by June 2015.
Preventing tax fraud and tax avoidance
The Council reached a political agreement on inserting an anti-abuse clause into the EU’s parent-subsidiary directive. This will require EU member states to refrain from granting the benefits of the directive to corporate arrangements that are put in place to obtain a tax advantage and do not reflect economic reality. The amending directive will be adopted at the next Council meeting without further discussion.
The member states will have until 31 December 2015 to transpose this amendment into the national law.
The Council also adopted a directive extending the mandatory automatic exchange of information between national tax authorities to prevent tax evasion by private savers.
The directive aims to remedy situations where a taxpayer seeks to hide capital abroad or assets on which tax is due. It implements a global standard developed by the OECD and endorsed by the G20.
Member states will start exchanging information automatically under the revised directive for the first time by the end of September 2017.
Banking union: single resolution fund
The Council reached a political agreement on a draft regulation for calculating the contributions to be paid by banks to the EU’s single resolution fund. The fund is being set up under a single resolution mechanism, which was established to ensure the orderly resolution of failing banks.
The contributions by banks will be annual and calculated on the basis of banks’ liabilities, excluding own funds and covered deposits, and adjusted for risk.
Other main items on the agenda
Financial transaction tax (FTT)
The Council discussed the state of play on a proposal to introduce a financial transaction tax (FTT) in 11 member states through the ‘enhanced cooperation’ procedure. The presidency reported on progress made during its term, setting out its views on the possible further handling of the dossier by the next presidency.
The Council launched its annual policy coordination process. The Commission presented the annual growth survey for 2015, which proposes priority actions to be taken by member states to ensure effective policies conducive to sustainable economic growth.
It also presented the alert mechanism report, which indicates that the macroeconomic situation warrants a further analysis (‘in-depth reviews’) in 16 member states: Belgium, Bulgaria, Croatia, Finland, France, Germany, Hungary, Ireland, Italy, the Netherlands, Portugal, Romania, Slovenia, Spain, Sweden and the United Kingdom.
The Council also discussed a review of reforms made in 2011 and 2013 to the EU’S economic governance framework, including the Stability and Growth Pact.
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Investment Offensive for Europe: EU Task Force identifies 2,000 potential projects worth €1.3 trillion
The EU Task Force on Investment published a report showing that there is significant potential for investment in Europe. It identifies around 2,000 projects across Europe worth some €1.3 trillion of potential investments.