Bringing banks' obligatory disciplines forward. The storms on tax evasion that caused such a commotion last week (see EUROPE 10820 for the initial reactions in the EU) call for a few considerations to be added to what this column had already explicitly stated in EUROPE 10818. It should not be forgotten that four member states - Germany, the Netherlands, Denmark and Finland - have taken a common step to accelerate some aspects of European banking discipline, which for the most part has been defined but application of which will be slow and gradual.
The four countries have called for bail-in instruments - through which the banks themselves might become responsible for the bailout of their resources - to be applied from 2015 instead of 2018, the date that is currently planned. EUROPE 10818 gave ample account of the document in which the four countries explained their objective: eliminating the link between bank management and public debt as soon as possible - bank restructuring must not be at the cost of the taxpayer. And this must be done before 2018. They recognise that the cost of bank refinancing could thus increase, but they observe that the markets are already taking account of this - and the counterbalance, the improvement of the national budgets' situation, would be immediate. The four countries promoting this idea call for a political agreement between the member states by June. The banks would be obliged to take precautions in order to confront their anticipated responsibilities.
The ECB agrees. Mario Draghi, the president of the European Central Bank (ECB), is firmly in favour of bringing the banks' responsibility forward to 2015 (for the above mentioned aspect). His statement last Thursday focused primarily on the issue of Cyprus and most of the reports focused on the clarification of this issue. However, EUROPE 10820 set out all the aspects of this position, according to which bank restructuring must be done without using taxpayers' money or paralysing payment systems. And Draghi added that the future rules on bail-ins should not come into force in 2018 as the European Commission has planned, but “well, well before, for example, in 2015”. This position of the four countries is very significant.
The word at the European Parliament. The European Parliament must in turn give its position on the bank restructuring directive as a whole, including the two deadlines - 2015 for the new rules in general, and 2018 for the specific bail-in aspect. The rapporteur, Gunnar Hökmark (EPP, Sweden) is apparently in favour of supporting the separation of the two deadlines, as proposed by the Commission, believing that the markets and investors need to time to adapt. The relevant parliamentary committee is due to approve this report on 24 April. The plenary session will then give its position.
Criticism of tax havens. For a long time I have upheld the need to clearly separate the two activities of the banks- the classic activity on the one hand (collecting and remunerating savings so as to finance the economy), and the speculative activity on the other. The dissemination last week of the huge amount of documentation on offshore companies has shed some light on tax havens. One should remain careful because the behaviour revealed is sometimes legally legitimate and it is not always the case of breaking of the law. The tax havens concerned are well-known - from the British isles to Dubai, and from Hong Kong to Singapore. Undeclared money or money earned abroad is deposited there. Huge sums of money are hidden behind intermediary companies, under various forms which, according to the experts, constitute real strategies of modern tax evasion. The EU is not inactive on this - EUROPE 10821 reported on its action and the measures that are planned or called for. Let me ask readers to take a look back at them.
Anti-crisis instrument. I'd like to add a general comment. The amounts at stake are enormous. Rules, means of control and cross-border cooperation must therefore be strengthened. Illicit transactions must be prosecuted, and those that seem lawful must become transparent or be banned. Even the people of Switzerland - the country of the banking secret - have said they are in favour of transparency. The shadow financial sector must disappear. The amounts at stake are huge - a quite significant share of the budgetary deficits of the countries of the EU could be shed if this aspect of tax evasion was eliminated or fought effectively.
(FR/transl.fl)