The French Presidency of the EU Council intends to focus on economic and green recovery from the Covid-19 health crisis over the next 6 months, according to its work programme published on 1 January.
The Presidency lists three main issues: - ensure economic policy coordination in the wake of the crisis to allow the full success of the European Recovery Plan; - financing the “growth of tomorrow”; - contribute to the construction of a “responsible capitalism”.
The latter will be achieved through finance “serving the dual transition to climate change and digital technology while fighting financial crime”. A reflection on “a new European model for growth, investment and employment” will be held on 10 and 11 March at an informal meeting of Heads of State or Government. This will be fed by the consultation on economic governance, relaunched by the Commission’s communication of 19 October 2021.
In the context of the ‘European Semester’ budget process, discussions on the review of the European economic governance framework will continue. This includes: analysis of the consequences of the Covid-19 crisis on the European economy and the challenges it faces; fiscal rules; the procedure for macroeconomic imbalances.
The French Presidency intends to bring out a coordinated strategy of investment and structural reforms to enable investment in the green and digital transitions. It will also start discussions on the targeted revision of the Union’s financial regulation in the 2021-2027 Multiannual Financial Framework and promote work on green budgeting. Paris wishes to focus on the environmental texts proposed by the Commission on 14 July 2021 (the ‘Fit for 55’ package), in particular the Carbon Border Adjustment Mechanism (see EUROPE 12762/1).
The Presidency states its wish to “make Europe a leader in sustainable finance”, for example by adopting the standard for green bonds. A ministerial conference in March will address green finance, industrial transition, taxonomy and the greening of public export support policies.
In accordance with the roadmap agreed between the three institutions in December 2020, “the Presidency will lead the work on the creation of new own resources, geared towards the climate transition, on the basis of proposals presented by the Commission in December 2021” (see EUROPE 12859/3).
Economic sovereignty and fairer taxation
As announced on 9 December 2021 by French President Emmanuel Macron (see EUROPE 12850/17), economic sovereignty will also be at the heart of the programme. Negotiations in the Council on banking and insurance prudential regulations (Solvency II and Basel III) will be pursued with the aim of “ensuring the resilience and competitiveness of financial institutions”. The Presidency is thus committed to advancing the Capital Markets Union and deepening the Banking Union, 20 years after the changeover to the euro.
The French Presidency also wants to put in place “a fairer and more efficient tax system”. Work will also continue on the proposal for a directive on energy taxation. A first assessment of the 1 July 2021 reform of the VAT rules for e-commerce will be prepared in view of the future Commission proposal in the second half of 2022.
It will also work on the transposition at EU level of the agreement on Pillar II of the OECD/G20 Project on Tax Base Erosion and Profit Shifting. Work on energy taxation will also be continued. Finally, it wishes to strengthen administrative cooperation between Member States and the fight against tax fraud and evasion.
In order to increase transparency, both in environmental and social terms and in the fight against corruption, it will give “priority attention” to the proposed Corporate Sustainability Reporting Directive (CSRD). France thus wants to make the EU “a forerunner in a context of strong normative competition”.
Similarly, the protection of financial transactions against cyber and criminal threats is a priority, according to the Presidency. It wants to advance the regulation of digital finance: MICA (Regulation on crypto-assets markets) and DORA (Regulation on operational resilience of the financial sector). The establishment of a European Supervisory Authority would make it possible to fight money laundering and terrorist financing more effectively, it said. This would be accompanied by a review of the rules on fund transfers to ensure the traceability of crypto-assets. A ministerial conference on sovereignty against financial crime will take place on 21 January 2022.
To consult the Presidency’s programme (in French): https://bit.ly/3EOfJcZ (Original version in French by Anne Damiani)