On Wednesday 16 September, during her first State of the Union address, Ursula von der Leyen, the President of the European Commission, set a target of funding “30%” of the Next Generation EU Recovery Plan for Europe through the issue of ‘green’ financial securities on the financial markets, i.e. almost €250 billion euros.
“We are world leaders in green finance and the largest issuer of green bonds worldwide. We are leading the way in developing a reliable EU Green Bond Standard”, said von der Leyen.
In addition, she added, “37%” of the national allocations from the Recovery Plan for Europe will fund recipient Member States’ measures and projects that promote the green transition.
The 37% target is already written into the German Presidency of the Council of the EU’s third compromise proposal on the Regulation establishing the Recovery and Resilience Facility, the budgetary instrument at the heart of the Recovery Plan for Europe.
The German document also focuses on protecting the EU's financial interests (see EUROPE 12559/16). This is something von der Leyen emphasised strongly: “We will ensure that money from our budget and Next Generation EU is protected against any kind of fraud, corruption and conflict of interest. This is non-negotiable”.
However, linking payment of EU financial aid to respect for the rule of law in the recipient country remains a challenge.
At a time when the EU is going through a crisis at a level not seen since the 1930s, “this is absolutely not the time to withdraw” the unprecedented budgetary support put in place at the start of the Covid-19 pandemic to enable Member States to commit the health expenditure needed.
Iratxe García Pérez (Spain), chair of the S&D group, called for a budgetary “golden rule” to be introduced to stimulate environmentally sustainable investment, along the lines of the golden rule limiting public debt.
In an effort to capitalise on EU citizens’ continued support for the euro, von der Leyen called for banking union in the euro area to be completed and for the capital markets to be amalgamated.
In its letter of intent to the European institutions, the Commission has announced legislative initiatives in finance (investment protection, markets in financial instruments, insurance sector), corporate governance and the fight against money laundering.
Taxation. Von der Leyen also confirmed that if the international negotiations at the OECD fail (see EUROPE 12553/16), the Commission will present a European solution on digital taxation at the beginning of 2021.
“We will spare no effort to reach agreement in the framework of OECD and G20”, said the President of the Commission. Despite recent disagreements with the White House, the Commission intends to strengthen the partnership between the EU and the US, including in the field of taxation, she added.
“But let there be no doubt: should an agreement fall short of a fair tax system that provides long-term sustainable revenues, Europe will come forward with a proposal early next year”, she told MEPs.
The President of the Commission made no other major announcements with regard to taxation.
Manon Aubry (France), Co-chair of the GUE/NGL group in the European Parliament, responded to the speech by saying: “Mrs von der Leyen, you have spoken for more than an hour and 20 minutes, yet at no point did you mention tax justice, taxing the wealthy, or tax havens in the European Union, which have a poisonous impact on social justice in the Union”.
In addition to a tax on digital services, the Commission’s letter of intent mentions revision of the Energy Taxation Directive (see EUROPE 12439/17).
The State of the Union speech can be found at: https://bit.ly/3iBviKK (Original version in French by Mathieu Bion and Marion Fontana)