The President of the European Commission, Ursula von der Leyen, set out on Wednesday 14 September the “basic principles” of a reform of the European economic governance framework, which will aim to strike a balance between stimulating “strategic investments”, and ensuring the stability of public finances.
“Member States should have more flexibility on their debt reduction paths. But there should be more accountability on the delivery of what we have agreed on”, said Ms von der Leyen, during her State of the Union speech.
This idea of defining distinct trajectories in the pace of reduction of its public debt with the Member State concerned, favouring national ownership of the rules and necessary reforms, combined with increased firmness in the respect of the rules, is shared by the Member States (see EUROPE 13019/8).
Ms von der Leyen also called for “simpler” fiscal rules. These would be based on a public expenditure indicator for countries with excessive debt.
On the banking union, the Commission will present proposals to strengthen the framework for managing a crisis arising from the failure of a banking group (see EUROPE 12974/10).
Legislative proposals will also be tabled to enable the creation of a digital euro, a flagship project of the ECB.
Taxation. On taxation, Ms von der Leyen briefly mentioned a tax measure included in the SME support package, namely the BEFIT proposal which will aim to “establish a single set of tax rules for doing business in Europe” (see EUROPE 12721/3).
The Commission recently reiterated the European institution’s intention to present the BEFIT initiative in 2023.
In practical terms, BEFIT will consolidate the profits of the European members of a multinational group into a single tax base, which will then be apportioned between Member States according to a formula, to be taxed at national corporate tax rates.
Finances. In its letter of intent, the Commission also states its intention to present a legislative proposal to ensure access to financial data. The Commission, which has consulted publicly on ‘open finance’ (see EUROPE 12949/32), must submit its proposal by the end of 2022.
See the Commission’s letter of intent: https://aeur.eu/f/32e (Original version in French by Mathieu Bion with Anne Damiani)