European Union Policy Update—March re: Energy, Climate change, Economic, Monetary Union, Taxation and more
Last month the EU Agenda was dominated by three themes: 1) the Energy Union, 2) Greece and the future of the euro, and 3) tax planning and tax avoidance. Below we provide a brief summary of the key points.
1. Energy and climate change
On 25 February 2015, the European Commission presented its vision for a European Energy Union. This is the first major initiative by the new Commission and sheds light on the direction that Commission President Juncker wants to head in.
The Energy Union Communication is composed of 15 action items, which seek to address the EU’s security in energy supply, the further development of an internal energy market, an increase in energy efficiency, the EU’s policy on climate change as well as possible incentives for the research and development of new technologies in this field.
For more detailed analysis of the Energy Union package please read our latest blog entry here.
2. Economic & Monetary Union
Whereas in January news headlines revolved around the European Central Bank’s announcement of an expanded asset purchase programme—the Eurozone’s equivalent to the Quantitative Easing measures taken in the US and UK—February has been all about Greece’s request to prolong the Master Financial Assistance Facility Agreement (MFFA) signed in 2012.
The crux of the negotiations revolved around the conditions on the basis of which the current loan package would be extended. A lot of resistance to showing more (public) leniency with Greece came from other economically troubled countries, such as Spain, where the government fears the impact of a growing anti-austerity movement on its upcoming election results. In the end, on 24 February, the finance ministers of the Eurogroup agreed to grant Greece an extension of the existing MFFA, based on a renewed reform programme presented by the Greek government.
Looking to the future of the European Economic and Monetary Union (EMU), President Juncker made an interesting statement at the informal European Council meeting on 12 February. He insinuated, to the puzzlement of some Member States, that the report on the future of the EMU, which is being drafted by the four presidents (of the Commission, European Council, European Central Bank and Eurogroup) and due in June this year, considers the development of a “core” Europe a positive prospect.
With media attention centring on “Swiss Leaks” and HSBC last month, President Juncker declared the issue of aggressive tax planning and tax avoidance by corporations in Europe a priority for the new Commission. On 18 February, the College of Commissioners had its first debate on a fairer and more transparent approach to taxation in the EU and agreed that increased transparency and co-operation in the area of corporate tax is needed. The Commission agreed to present a Tax Transparency Package in March.
In parallel, the Greens/EFA group in the European Parliament surprised everyone in January by gathering enough signatures to request the formation of a committee of inquiry on the matter of Luxleaks. The details of the committee’s responsibilities were ironed out in February. It received the status of special committee (and not committee of inquiry) and was awarded a broad mandate to investigate cases of breaches or poor application of EU law with regard to taxation. The first meeting is foreseen for this evening (9 March), when their mandate and working programme will be discussed.