The European Finance Ministers will meet again on Tuesday 18 February in Brussels for an express meeting in the afternoon which should not last long and which will be marked above all by the adoption of a revised blacklist of non-cooperative jurisdictions in the area of taxes and by the adoption of a series of conclusions in the framework of the budgetary process of the ‘European Semester’.
EU blacklist. While the EU’s blacklist made a lot of noise this week, the “reservations” expressed at Wednesday’s meeting of Member States’ ambassadors to the EU (Coreper) on certain jurisdictions (see EUROPE 12424/16) have reportedly now been lifted, one European source told EUROPE on Friday 14 February. The item is therefore currently scheduled for adoption without discussion, even though some sources did mention the possibility of a discussion.
According to the same European source, none of the eight countries currently on the blacklist (American Samoa, Fiji, Guam, Oman, Trinidad and Tobago, the US Virgin Islands, Vanuatu and American Samoa) will be removed. However, the list is expected to be expanded, with the addition of at least four territories: the Cayman Islands, Panama, the Seychelles and Palau (see EUROPE 12425/8).
As for Turkey, which should have been on the blacklist due to an automatic partial exchange of information on bank accounts, for the time being, it is ultimately expected to be kept on the ‘grey’ list of countries that have made commitments, in order to avoid new tensions with Ankara.
Asked about the politicisation of the process, one diplomatic source assured that decisions for each country were based on technical criteria. “There is no political discussion without a very thorough technical analysis”, she said.
Still on taxation, the EU Council will adopt, without discussion, the Directive aimed at simplifying value added tax (VAT) for SMEs (see EUROPE 12366/3) and the Directive and Regulation aimed at better combating VAT fraud in the e-commerce sector (see EUROPE 12366/4), which were agreed by the European Finance Ministers at the November ECOFIN Council.
EBRD. Over breakfast, ministers will attempt to choose a single candidate for the presidency of the European Bank for Reconstruction and Development (EBRD) from among the Polish Finance Minister, Tadeusz Kościński, and former Italian Finance Minister, Pier Carlo Padoan, who have joined French Treasury Director, Odile Renaud-Basso (see EUROPE 12421/17).
European Semester. As part of the discussions on fiscal and socio-economic policy in 2020, ministers are expected to adopt a recommendation on the most appropriate policy mix at the euro-area level.
According to a draft text, Member States are invited to support public and private investment in full compliance with the Stability Pact. Those with high debts must pursue prudent policies to put public debt on a sustainable, downward path. Member States with a favourable budgetary situation will be able to strengthen high-quality investment. If downside risks were to materialise, budgetary responses should be differentiated, with a view to adopting a more favourable policy at the aggregate level, while ensuring full compliance with the Pact, the text adds.
The recommendation also contains an element on “aggressive taxation” and points to the need for a fiscal “stabilisation function”, the diplomatic source noted.
Economic governance. As in the Eurogroup the day before (see EUROPE 12422/13), Ministers will have a first round of discussion on the evaluation of the European fiscal rules that the Commission has just launched (see EUROPE 12419/4).
One of the questions asked is how best to encourage environmentally sustainable investments. The Commission does not propose, at this stage, an answer to a complex and divisive issue among Member States: some countries are calling for ambition, but others fear that Pandora’s box will be opened, the same source said.
Budget. The EU Council is also expected to recommend that the European Parliament gives discharge to the Commission on the implementation of the 2018 EU budget and will adopt by consensus conclusions on the budgetary guidelines for 2021.
The guidelines are intended to assist the Commission in preparing the draft EU budget plan for 2021 and in no way prejudge the ongoing negotiations on the multiannual financial framework 2021-2027, a diplomatic source (see EUROPE 12426/1) said.
G20. Finally, ministers will approve the EU mandate for the G20 meeting to be held from 20 to 23 February in Riyadh, Saudi Arabia.
The document, of which EUROPE has had a copy, notes that, while trade tensions seem to have eased somewhat – although they remain high – geopolitical tensions are still high. “The G20 should [...] be ready to respond to a larger than expected slowdown", it warns.
Also mentioned is the reform of international taxation at the OECD (see EUROPE 12425/7). The text reiterates the EU’s support for the two-pillar approach defined by the OECD and its commitment to an agreement by the end of 2020. (Original version in French by Marion Fontana and Mathieu Bion)