The Financial Transaction Tax (FTT) will be back on the agenda of the European Finance Ministers on Friday 14 June in Luxembourg. While no further ministerial discussions on this subject had taken place since 2016, the ministers will take stock of the progress of the dossier, which was relaunched by France and Germany in 2018 (see EUROPE 12151/2). They will also take note of the progress made in the establishment of the Banking Union and will hold a debate on sustainable finance.
FTT. The inclusion of the FTT in the agenda of the Ecofin Council had been requested at the end of May by Germany, supported by the members of the enhanced cooperation (see EUROPE 12261/6), after a first compromise text inspired by the French model (see EUROPE 12151/2) had been tabled.
The content of the discussion at the Ecofin Council will depend on the outcome of the meeting to be held just beforehand between the ten Member States participating in enhanced cooperation, namely France, Germany, Belgium, Portugal, Austria, Slovenia, Greece, Spain, Italy and Slovakia.
For the time being, only one "point of information" on the progress of the discussions is planned, on the basis of a note from the German delegation, a diplomatic source said on Wednesday, 12 June.
But if the meeting of the ten ministers was "productive", the discussion could be a little more "concrete", said one European source, who nevertheless remained rather optimistic on Wednesday about an in-depth discussion at the Ecofin Council. The indicative programme of the meeting currently provides only about 20 minutes for public discussion.
The purpose of the discussion is twofold: to test the propensity of other Member States to join enhanced cooperation, but also to keep Member States that are not participating in it and have a say in the implications of the tax on their national systems informed of the latest developments.
The German note presents the main elements of the tax. The proposed FTT would be levied on acquisitions of shares of listed companies whose head offices are located in the member states and whose market capitalisation exceeds €1 billion on 1 December of the year prior to the year when the tax is assessed. The tax rate would not be lower than 0.2% of a security’s purchase price at the time of acquisition.
The note also states that the revenue should be allocated to the EU budget or the future euro area budget and calls for the pooling of revenue collected at national level among participating Member States "according to a distribution mechanism to be further defined".
These are the two issues that will be discussed on Friday between the ministers of the ten countries, another diplomatic source said.
The Franco-German proposal on mutualisation aims to reassure some small countries that the introduction of the FTT will not cost them more than the tax will bring in, it explained. But some countries are not yet convinced: this is the case in Spain.
Banking union. In addition, the Romanian Presidency of the Council of the EU will present a progress report on the work concerning the Banking Union.
The report also reviews the adoption of risk reduction measures and measures to tackle non-performing loans, as well as technical work on the European Deposit Insurance Scheme (EDIS). Again, the discussion between ministers should be very brief.
Sustainable Finance. The Council of the EU will then hold a closed-door exchange of views on the European Commission's message 'A clean planet for all' setting out the vision for a future long-term strategy for the EU by 2020 to successfully transition to a climate-neutral European economy by 2050 (see EUROPE 12148/1).
Various Council configurations have already discussed the Communication (see EUROPE 12201/11) and it is now the turn of the European Finance Ministers, who will focus their discussions on investment and financial aspects. According to a European source, the debate should address sustainable finance and, perhaps, taxation.
The discussions will take place on the basis of a Chairman's note from the Economic and Financial Committee (EFC), Hans Vijlbrief, dated 5 June, which also emphasises the importance of recognising that transition can be difficult for a number of sectors and that social and regional disparities could increase if they are not adequately addressed.
The note raises several questions to guide the debate, including whether the Communication defines "the right direction" for achieving the objectives of the Paris Agreement or what types of measures are needed at European and national level to best promote private investment.
The results of the discussions will be consolidated in a letter from the Presidency that will feed into the preparations for the discussions on climate change at the European Council on 20 and 21 June.
European semester. Ministers will also discuss the country-specific recommendations presented by the Commission on 5 June as part of the budgetary process of the European Semester (see EUROPE 12269/2), on the basis of a horizontal note prepared by the EFC. The recommendations will be formally adopted at the Ecofin Council on 9 July.
The Council will also take several decisions in the context of the Stability and Growth Pact. It is expected to close the excessive deficit procedure for Spain and take decisions on Hungary and Romania, confirming that effective measures have not been taken, and make further recommendations on the measures to be taken to correct the deviations.
In addition, Ministers will adopt a report on progress made under the Romanian Presidency of the Council of the EU on tax issues, to be presented to the European Council on 20 and 21 June. They will adopt conclusions and a six-monthly report on the work of the Code of Conduct Group.
They will also note the removal of Dominica (see EUROPE 12269/3) from the European 'blacklist' of non-cooperative jurisdictions for tax purposes. (Original version in French by Marion Fontana)