In a resolution adopted on Wednesday, 6 July, by 450 votes to 132 with 55 abstentions, MEPs condemn countries that have abused their vetoes in the Council of the European Union on tax matters (see EUROPE 12987/11).
In its resolution, the European Parliament recalls that Hungary had already approved the agreement reached at the OECD as well as during the ‘Ecofin’ Council last April before rejecting it in mid-June (see EUROPE 12974/8). It also points out that, in the international agreement, Hungary’s demands have already been largely taken into account, including substance-based carve-outs.
“Poland blocked [the directive] in order to receive recovery plan money, so Orbán is doing the same”, stated Aurore Lalucq, a French negotiator on the resolution for the European Parliament’s S&D group, when interviewed by EUROPE on Thursday, 7 July.
“The [European] Parliament is calling on the EU to get rid of the Hungarian veto and to ensure that this country—that is not respecting the rule of law—does not have more power than the sum of the countries that are respecting it”, continued Ms Lalucq, asking the European Commission to “not give in to this blackmail”.
In the short term, if Hungary maintains its veto, the European Parliament urges the European Commission and Member States to consider potential measures that would enable the EU to honour its international commitments. The resolution notably mentions the ‘enhanced cooperation’ procedure laid down in Article 20 TEU.
This solution had been brought up during the debate in the Committee on Economic and Monetary Affairs with European Commissioner for Taxation Paolo Gentiloni—a solution that he did not support (see EUROPE 12980/23).
“We are open to other solutions, but we must find one”, felt Ms Lalucq. “Enough is enough; we’re going to need that money!” she added.
In its resolution, the European Parliament also urges the European Commission to use the “passerelle” clause (Article 116 TFEU), which provides that, in the event that there is a distortion of competition in the internal market, the EU institutions must take action to remedy it by adopting acts in accordance with ordinary legislative procedure and thus by a qualified majority of Member States in the EU Council.
MEPs also call for a reopening of discussions on gradually introducing qualified majority voting for certain tax matters by adopting a phased approach in line with the outcome of the Conference on the Future of Europe.
It is now up to the Czech Presidency of the Council of the EU to negotiate with the Hungarian government (see EUROPE 12986/1). “This Presidency must not be left to face Hungary alone, hence this appeal from the [European] Parliament”, stated Ms Lalucq.
To read the European Parliament resolution: https://aeur.eu/f/2ji (Original version in French by Anne Damiani)