Meeting in EU Council on Friday 21 June, the European finance ministers will discuss the package on value added tax (VAT) in the digital age (ViDA), will be briefed on the European Commission's proposals as part of the ‘European Semester’ fiscal process and will initiate work on implementing the G7 countries’ decision on new loans to Ukraine.
Taxation. The ‘ViDA’ package, which aims to reduce the administrative burden on businesses and combat fraud, comprises three legislative proposals: single registration, exchange of information on the basis of electronic invoicing and digital platforms.
While there is already unanimous agreement on the first two texts, the third continues to pose a problem, as Estonia maintained its opposition on Wednesday 19 June at the meeting of Member States’ ambassadors to the European Union (Coreper) (see EUROPE 13431/13).
According to a diplomatic source, the Belgian Presidency of the EU Council is endeavouring to convince the Estonian authorities through an updated compromise proposal. They are concerned about the impact of the future rules, particularly on the shared mobility company Bolt, which is based in Tallinn.
“A lot of concessions have already been made, and it’s time to wrap things up”, this source said on Tuesday 18 June. “Small clarifications have been made, but there will be no substantial changes to the compromise”, the source added, referring to “limited, marginal and progressive” changes, such as the possibility of postponing the entry into force of future rules.
Still on the subject of taxation, the Ecofin Council will also discuss the work being done at the UN on closer cooperation in tax matters.
European Semester. Ministers will have the opportunity to react to Wednesday’s presentation of the socio-economic policy proposals sent to each Member State by the Commission as part of the 'European Semester’ fiscal process (see EUROPE 13435/1).
Above all, in accordance with the rules of the Stability Pact, the EU institution is proposing that the EU Council declare the existence of an excessive deficit in seven Member States (Belgium, France, Hungary, Italy, Malta, Slovakia and Poland), in addition to Romania, which is already the subject of an excessive deficit procedure. If the EU Council validates its approach in July, the Commission suggests proposing a budgetary consolidation path in the autumn, in line with the entry into force of the reform of the Stability Pact at the beginning of 2025.
Ukraine/Russia. Speaking by videoconference, the Ukrainian Finance Minister, Serhiy Marchenko, will give an update on the implementation of the aid programmes agreed with the IMF and the EU as part of the ‘Ukraine Facility’, worth €50 billion between now and 2027.
The Ecofin Council will initiate work aimed at implementing for the EU the decision of the G7 summit to grant Ukraine, from 2025, loans totalling 50 billion dollars, which would be pledged against current and future profits from the assets of the Bank of Russia frozen in the EU (see EUROPE 13433/23).
On the European side, the European Commission will be responsible for presenting a legislative proposal based on the granting of macrofinancial assistance (‘MFA+’), the adoption of which will not require unanimity of the Member States in the EU Council. The EU loan could amount to “50 or 60%” of the total value, according to this diplomatic source. And the EU27 would be collectively liable for the funds lent by the EU. It will be up to the next Hungarian Presidency to bring these discussions to a successful conclusion in the EU Council.
RRF. The Ecofin Council will take stock of the implementation of the Recovery and Resilience Facility (RRF), the financial instrument of the Next Generation EU Recovery Plan, which to date has disbursed over €240 billion in grants and loans to Member States.
In its proposals on the ‘European Semester’, the Commission makes recommendations to ensure that EU countries spend the funds allocated more quickly as the deadline of the end of 2026 approaches.
On Friday, ministers will adopt Ireland’s revised post-Covid-19 recovery plan, with a total of €1.15 billion in grants alone (see EUROPE 13433/32).
To see the proposal for a decision by the EU Council and its annex: https://aeur.eu/f/cqy; https://aeur.eu/f/coe
EIB. On Friday, the ministers will meet in their capacity as EIB Governors. The President of the EU Bank, Nadia Calviño, will report on the EIB’s activities in 2023 and present the roadmap for the period 2024-2027.
In addition to massive support for the climate transition and so-called ‘critical’ technologies, it provides for increased investment in the defence sector (updating of the definition of dual-use goods eligible for financing and a specific credit line) (see EUROPE 13407/7). (Original version in French by Mathieu Bion and Anne Damiani)