[...] Today, two pillars of Banking Union – single supervision and resolution – are in place. Thorough implementation of these pillars and of the related rules is key, and the Commission is monitoring this closely.
But we need to go further.
In our work to complete Banking Union, we have always linked the sharing of risks with the need to reduce risks.
The Five Presidents' Report already noted the relevance of this. As we said in our Communication on completing Banking Union last November, the Commission is committed to further reduce risks, and this includes assessing the prudential treatment of sovereign debt.
From the Commission's perspective, any future decision on possible changes in prudential treatment of sovereign exposures would of course need to pay particular attention to financial stability aspects, and for those purposes draw on relevant quantitative analysis.
But let me also highlight once again that we need parallel progress on three fronts to complete the Banking Union: 1. a functioning European Deposit Insurance Scheme; 2. a genuine backstop; and 3. further measures to reduce risk.
Secondly, in the context of Panama papers, Ministers showed strong and unanimous commitment to lead the fight against tax evasion and tax avoidance.
The European Commission welcomes the EU-28 agreement to enter into a pilot project for the automatic exchange of information on ultimate beneficial owners. This is the follow-up of the letter by the so-called G5 last week in Washington. Commission will now work to facilitate and assist in putting this agreement into practice. [...]
In parallel, it is important to achieve quick progress on the Commission's legislative proposals.
First, we fully support the Dutch Presidency’s goal to reach a political agreement on the Anti-Tax Avoidance Directive in May. With the right political will, this is entirely achievable. And the progress so far should allow the final text to be ambitious - without gaps or loopholes.
Second, we need to maintain momentum on our transparency agenda. We hope for rapid progress on the rules requiring multinationals to publish country-by-country information on their income tax, which the Commission proposed last week.
Third, the Commission plans to present a revised proposal for the Anti-Money Laundering Directive, in the context of the fight against terrorism financing. Certainly we will evaluate the possibility for this proposal to be broader to go beyond measures for terrorism financing, also to capture issues on tax avoidance. [...]
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Remarks by Vice-President Dombrovskis at the second informal ECOFIN press conference
[...] Some observations on today’s discussion on how to simplify and make more predicable the way we apply the Stability and Growth Pact.
First of all, we all agreed that – to uphold sound public finances - we need a consistent application of our fiscal rules. This is all the more important for countries in the Euro area. [...]
However, despite that the Commission has improved the transparency of how the rules are applied, there is a perception that the rules have become too complex. We need to acknowledge and address this perception, for the sake of budget planning and public understanding of it. [...]
The Commission has identified already in a Communication of October last year three ways to improve the implementation of the rules:
· First, we have to ensure more consistency between the debt rule and the adjustment path of Member States towards the medium term budgetary objectives.
· Second, unforeseen variations in economic activity should be taken into account, both when the economic situation turns out better or worse than initially foreseen.
· Finally, we need to simplify the assessment of compliance with the targets under the SGP. Today, so many different indicators exist, that it is difficult to see clearly.
Today’s discussion focused mainly on this third point. The Commission has been studying the possibility of reducing the number of operational indicators. Our intention is to focus more on what is really in the hands of the Ministers of Finance, namely the evolution of primary expenditure and new revenue measures. This does not mean that we will put aside the deficit and the debt objectives. It is rather about making it clear what governments are expected to do to achieve these objectives. There was I would say broad support to pursue the work in this direction. [...]
And on today's second topic, on fight against VAT fraud.
Every year, in the EU, almost €170 billion of VAT revenues are lost, of which around €50 billion euros to cross-border transactions, also called carrousel fraud. This is why the Commission recently presented VAT Action Plan with a series of short term and medium term steps that form our strategy to fight against VAT fraud. There has been broad support for the fact that we need to tackle this issue.
In the short term, we must boost cooperation between VAT tax administrations in different Member States. This will help us detect the networks of companies that commit so-called carrousel fraud at a cost of billions of euros to our national budgets.
Today’s discussion on upgrading and linking up our IT systems is an important step because it will mean that our tax authorities will get critical information much faster.
The Commission welcomes the wide support for this direction of the work and also will finalise the feasibility study on the Social Network Analysis tool, also called Transaction Network Analysis (TNA) soon.
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