The Franco-German proposals on the creation of a fiscal capacity for the Eurozone have failed to convince the Austrian finance minister, Hartwig Löger.
“We need to go into greater depth on the subject”, said the President-in-exercise of the Ecofin Council in Vienna on Thursday 5 July, during an exchange with the press. We look favourably upon any proposal on deepening Economic and Monetary Union, but “we are critical” of the idea of having instruments from the European Stability Mechanism (ESM) with its conditional criteria and, in parallel, an autonomous budget for the Eurozone based on other definitions, he said. He considers that “these two proposals need to meet somewhere in the middle” before there can be any discussion of amounts.
In Meseberg in mid-June, France and Germany proposed the creation, after 2020, of the Eurozone's own fiscal capacity overseen by the European Commission, together with a European stabilisation function fed into by the ESM (see EUROPE 12044).
In 2018, Austria will present a budget in balance, for the first time in 65 years.
Setting out the economic priorities of the Austrian Presidency of the Council of the EU of the second half of 2018, Löger prioritised reducing risks in the banking sector, before moving forward on risk-sharing. In reply to a question from EUROPE, he said that a political discussion on the introduction of the European deposit insurance scheme (EDIS) could take place in the autumn, for instance on questions concerning support for banking liquidity. However, there will be no political agreement in principle at the Council under the Austrian Presidency, he stressed.
Web tax. On taxation matters, Austria aims to meet the challenge of fair taxation of digital platforms, by placing the legislative proposal on the agenda of the informal meeting of the European finance ministers, to be held in Vienna in early September (see EUROPE 12044).
Promising “solid progress” under the Austrian Presidency, Löger observed that on average, companies are taxed at a level of 23%, compared to 8% for companies in the digital sector.
Still on taxation matters, the Austrian minister considers that there are prospects of substantial progress on the harmonisation of the corporate tax base (CCCTB), adding that this progress would not be definitive.
Post-2020 EU budget. When asked about the forthcoming negotiations on the multiannual financial framework 2021-2027, Löger pointed out that Austria was a net contributor country and called for a post-2020 EU budget of 1% of GNI.
The minister made the case for a reduction in administrative costs and a detailed analysis of the effectiveness of spending, for instance in the traditional EU policies such as agriculture and cohesion, before deciding whether and to what extent cuts are needed. We have to “see whether there are hidden costs”, he said. (Original version in French by Mathieu Bion)