On Tuesday 16 February, the European Ministers of Finance will focus on updating the European ‘black’ list of non-cooperative jurisdictions from a fiscal point of view and the implementation of the Next Generation EU Recovery Plan.
An exchange of views is planned on the European ‘black’ list of tax havens, which is revised twice a year. On Friday, the revision was still not unanimous in the Council of the EU. It is once again the fate of Turkey that divides the Member States (see other news).
If no agreement can be reached before the Ecofin Council, the list could be revised by written procedure later, but imperatively in February, a European source said on Friday 12 February.
FATCA. As announced, the US Foreign Account Tax Compliance Act (FATCA), will also be discussed in a ‘miscellaneous’ item at the request of the Dutch minister (see EUROPE 12655/31).
According to a Dutch note prepared for the meeting and obtained by EUROPE, the country wants to draw attention to two issues. The first concerns the lack of reciprocity in the exchange of information between EU Member States and the US. The second concerns the tax and banking obligations of EU residents with dual nationality, known as “accidental Americans”.
According to the Netherlands, a “permanent solution” should be proposed, which would both solve the banking problems of EU citizens with US citizenship and simplify the procedures for renouncing citizenship and reduce their costs. A preferred option would be to propose an exception for this group of persons to the obligations under FATCA, the note states.
European Recovery Plan. As requested by the Portuguese Presidency of the Council of the EU, the ministers will take stock at each Ecofin Council of the implementation of the Recovery and Resilience Facility, the budgetary instrument at the heart of the Next Generation EU that the European Parliament approved this week (see other news and EUROPE 12654/1).
On Friday, the President of the European Parliament, David Sassoli, and the Portuguese Prime Minister, António Costa, signed the regulation establishing the Facility, which is expected to come into force on 18 February.
Member States have until the end of April to officially present their national recovery plans in line with Commission guidelines (see EUROPE 12643/4), notably on the ‘do no significant harm’ principle (see other news). Poland, Slovakia and Finland were invited to present their respective draft recovery plans on Tuesday.
The Commission, which is already in close contact with some 20 Member States, emphasises the need to: - find the right balance between investment and reform; - identify credible milestones to assess the achievement of national plans for releasing aid tranches; - have robust national mechanisms for audit and control of expenditure.
According to Reuters, the European institution is asking Hungary to reform its public procurement laws, which Budapest has formally denied.
One issue that could be addressed concerns the loans that a Member State may apply for in addition to the grants it will receive. Nearly ten Member States have reportedly requested additional support.
Concerning the SURE instrument to support national short-time working schemes, almost €10 billion remains available out of an initial total envelope of €100 billion (see EUROPE 12649/3). The Commission is asking States to express their interest in benefiting from it.
In addition, the Commission also wants to raise, with Member States, the topic of financing Next Generation EU by issuing bonds on behalf of the EU27. The aim is to facilitate coordination between bonds issued at European and national levels.
Post-Covid-19 development assistance. Ministers will discuss policy priorities and financing for post-Covid-19 recovery in low-income non-Member States, in particular to prevent a major public debt crisis in these countries, especially in Africa.
This discussion, which will be attended by the President of the Paris Club, Emmanuel Moulin, and the President of the EIB, Werner Hoyer, will help prepare the spring meetings of the World Bank and the IMF as well as the one of the G20.
The Commissioner for International Partnerships, Jutta Urpilainen, will present to ministers the Commission’s ideas for a common EU position in the G7 and G20 and more broadly at the multilateral level. She also suggests exploring the possibility of extending the common multilateral framework for the coordinated treatment of debt beyond the G20-Paris Club Debt Service Suspension Initiative (DSSI) to middle-income countries in debt distress (see EUROPE 12656/4, 12649/2).
The aim is to give substance to the EU initiative for global recovery, proposed by the President of the Commission, Ursula von der Leyen, in May 2020, by combining discussion on public debt relief and investment with discussion on the UN sustainable development agenda (see EUROPE 12495/11).
Budget. The Ecofin Council will adopt EU Council conclusions on the budgetary guidelines for 2022. The EU Council considers that the EU budget for 2022, reinforced by funds from the temporary recovery instrument, Next Generation EU, “will contribute to the recovery of the European economy in the aftermath of the Covid-19 pandemic”.
See EU Council conclusions: https://bit.ly/3qiqZaZ
The EU Council will also adopt a recommendation aimed at giving discharge to the European Commission on the implementation of the EU’s general budget for 2019.
Finally, with a view to the spring meetings of the international financial organisations, the ministers will give a mandate to the Economic and Financial Committee to prepare a ‘terms of reference’ for Europeans. (Original version in French by Marion Fontana, Mathieu Bion, with Aminata Niang and Lionel Changeur)