European Union

The Benjamin Franklin quote above is increasingly becoming true, even to the old ‘certainty’ in the EU that common tax policies – demanding unanimous decision-making between Member States – will only move at glacier speed through the negotiations.

Corporate taxation currently features big on the European policy agenda, and is unlikely to lose ground any time soon. A combination of heightened media attention, revelations of tax evasion through Luxleaks or Panama Papers, budgetary constraints in many countries and increased awareness by the public have created unprecedented momentum for a more coordinated EU corporate tax policy.

The undeniable truth (?) of the Hart quote notwithstanding, this opportunity to be civilised in itself comes at a prize. The changes to tax rules that already have been and will be discussed have the potential to substantively impact how businesses pay and report taxes, how the companies are structured and not only how they do tax planning, but how they do business as such, in Europe.

Rules on interest deduction limitations, hybrid mismatches and controlled foreign companies, whilst seemingly ‘just’ an implementation of OECD guidelines might have further reaching consequences than any parties imagined when these issues where negotiated – in the context of voluntary guidelines – at the august Paris based institution.

In parallel, companies’ own corporate taxation policies are increasingly scrutinized by the public, with possible impact on reputation and side-effects on the ability to influence public policy not limited to taxation – and with layers to be further applied, if the Commission’s proposal on public country-by-country reporting gets tailwind through legislative negotiations.

Nevertheless… the time for thinking of EU tax policy is now! Work on greater harmonization of corporate taxation rules in the EU and to close loopholes stemming from different national tax laws is on full throttle as no EU government – or anyone else for that matter – wants to be seen as blocking the crack down on tax evasion. And rightly so!

Automatic exchange of tax rulings between EU Member States’ tax authorities and sharing detailed information on companies’ revenues, profits and taxes paid have already been agreed on – in both cases within only a few months after publication of the Commission’s legislative proposal.

Currently, EU countries – pushed forward by the ambitious Dutch Council Presidency – are working hard on the abovementioned issues of the anti-tax avoidance to tackle base erosion and profit shifting – where substantive changes to interest deductibility or hybrid mismatches are expected to be agreed on soon. A new proposal to increase tax transparency of multinational companies has also just been brought forward and later this year more work on a harmonized EU corporate tax base is expected.

But whilst the pace in acting affirmatively towards tax avoidance is laudable, the speed of the legislative process – leaving only a narrow window for the business community and experts to provide input – entails the risk that whilst the starting point and pace was benevolent and laudable, the end result might lead to unwarranted damages – as is always the risk, when regulation is hastened forward.

Martin Bresson

AMENDMENTS 7 - 84 - Draft opinion on the reinforcement of checks against relevant databases at external borders
Committee on Foreign Affairs

Source : © European Union, 2016 - EP

Source : © European Union, 2016 - EP

Source : © European Union, 2016 - EP

Poland v Parliament and Council
Principles of Community law
The new EU directive on tobacco products is valid

Poland v Parliament and Council
Principles of Community law
The new EU directive on tobacco products is valid

Poland v Parliament and Council
Principles of Community law
The new EU directive on tobacco products is valid

AMENDMENTS 1 - 27 - Draft opinion on the preparation of the post-electoral revision of the MFF 2014-2020: Parliament's input ahead of the Commission's proposal
Committee on Foreign Affairs

Source : © European Union, 2016 - EP

On 21 April, SEDE held a public hearing to address the cyber defence and resilience from the CSDP perspective at the EU level and national levels. How to build the resilience and efficiently protect critical infrastructures? Which are the cyber warfare capabilities in our changing world? Given that cyber security stays high on the European agendas and is one of the Presidency priorities, it will be extremely interesting to gather different experts and hear which their insights are.
Location : Paul-Henri Spaak 5B001
Programme
Programme
Presentation
Presentation by Steve Purser, Head of Core Operations Department, ENISA
Source : © European Union, 2016 - EP

Speech by Jacek Bylica, Principal Adviser and Special Envoy for Non-proliferation and Disarmament, EEAS : [EN]
Source : © European Union, 2016 - EP

Welcome to Tuesday’s edition of our daily Brussels Briefing. To receive it every morning in your email in-box, sign up here.

EU economic chief Pierre Moscovici, right, with Portugal's new finance minister in Lisbon

There’s been a rare spate of good economic news for the eurozone recently, with Eurostat announcing last week that the currency union’s gross domestic product had finally returned to pre-crisis levels and was growing at a 0.6 per cent quarterly clip – enough to outpace the US or the UK so far this year. But growth remains uneven across the 19-member bloc, and the first quarter’s performance remains meagre by historical standards. As a result, it will likely not be enough to help eurozone countries currently finding it difficult to get their debt and deficit levels back under EU budget ceilings.

Those countries sparring with Brussels over such budget targets – France, Italy, Spain and Portugal – will be in the spotlight today when the European Commission issues its new economic forecasts, which will include predictions on whether any of them are making progress towards getting their deficits below the 3 per cent of GDP threshold or – in the case of Italy, which is already below the deficit ceiling – are cutting their debt piles fast enough.

Read more

DRAFT REPORT on EU strategic communication to counteract propaganda against it by third parties
Committee on Foreign Affairs
Anna Elżbieta Fotyga

Source : © European Union, 2016 - EP

General : The award ceremony will take place at the Vatican on 6 May at 12:00. It will be introduced by “laudatio” speeches by European Parliament President Martin Schulz, Commission President Jean-Claude Juncker and Council President Donald Tusk. On the previous day, the three EU Presidents will take part in a panel debate about the state of the EU, preceded by an address by Italian PM Matteo Renzi.

Source : © European Union, 2016 - EP

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On Sunday Venezuela switched time zone to save on energy; and the people are on the brink of facing famine.

The government has reduced access to food and electricity and the government is taking a series of increasingly desperate measures to address public discontent.

Since last week, access to electricity is rationed to four hours a day. In addition, public servants have a two-day week (Monday, Tuesday). Changing time zone was the latest, but not the most desperate of measures.

The electricity problem is accentuated by the worst drought of the last forty years that has reduced water in the country’s hydroelectric power stations.

With a 70% reduction in international oil prices, the country’s finances have all but collapsed. Last week the government announced a 30% rise of the minimum wage to 15,000 Bolivar. But, this is not expected to have a huge impact as the country is experiencing 180,9% inflation. Officially, 15.000 Bolivar correspond to approximately €35; in reality this is more €13.

Food shortages are getting acute.

In 2014, shortages were triggered by a policy of food subsidies, which motivated people to massively engage in contraband trade with Colombia. Given a sinking economy, Venezuelans would sell subsidized food and fuel on the border to make ends meet. It was then, in May 2014, that Maduro introduced food rationing. But as people were going around to buy the same amount of food from place to place, rationing became more sophisticated.

Venezuela now uses biometric measures to ration food (fingerprints).  But, now people are going hungry, with crowds looting stores.

Last week the regional government of Villalobos asked citizens to stay at home for their own security. In the capital Caracas looting is spreading out in various neighborhoods by people shouting “we are hungry.”

Supermarkets are expected to run out of food stock by the end of the first week of May, according to the Venezuelan Chamber of Food.

People stand in line for hours to purchase basic goods.

(Huffington Post, Reuters, PanAm)

The post Venezuela has food until the end of the week appeared first on New Europe.

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Berlin does not want Tel Av to “instrumentalize” its alliance key and is rethinking its unconditional support Der Spiegel reports.

One of the first tangible policy effects is that Tel Aviv can no longer count on German support to avoid the labelling of settlers’ products in the West Bank, Ytnews reports.

A free press daily, Israel Hayom, came with a story in February quoting Angela Merkel in a meeting with Israel’s Prime Minister. Obviously leaked by Benjamin Netanyahu, the leak claimed the German Chancellor would not push forward with a two-state solution at this point in time, forgetting to mention that she was also highly critical of Israeli settlement policy.

Israel now has a population of 350,000 settlers, spread across 125 settlements in the West Bank. The policy consensus in Berlin is apparently that this policy undermines a two-state solution. The majority of the Israeli cabinet is openly opposing the two-state framework and is heading towards a direction that many in Germany compare to South Africa’s apartheid regime.

Both the German Foreign Ministry and the Chancellor’s advisors now believe Israel has taken the Chancellor’s pledge to support the security of the Jewish State as a diplomatic carte blanche.

Unconditional is being withdrawn.

Former ambassador to Israel and current foreign ministry political director, Andreas Michaelis, is apparently opposing accommodating to requests habitually made by Benjamin Netanyahu’s administration. And the chancellor’s advisor, Christoph Heusgen, is on the record supporting EU policy on labeling settler products.

Berlin is not the only traditional ally skeptical of current Israeli government policy. US Secretary John Kerry said in December 2015 in Washington that the “two-state solution” is becoming just a “throwaway phrase.”

Last week, Israel’s intelligence Minister Katz admitted that under the Obama administration Israel can no longer depend on a US veto in the UN Security Council, which is a key component of Israel’s national security. “With the current administration, we cannot be sure of that,” he said.

The Obama administration has used the Security Council veto once in seven years, to veto a resolution against Israeli settlements.

(AP, DPA, Der Spiegel, ynet, Jerusalem Post)

The post Berlin rethinks its support for Israel appeared first on New Europe.

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German and other European security officials accuse Russian media of launching what they call an “information war” against Germany. By twisting the truth in reports on Germany’s migrant crisis, the officials told Reuters, Russia hopes to fuel popular anger, weaken voters’ trust in leaders such as Chancellor Angela Merkel, and feed divisions in the European Union so that it drops sanctions against Moscow.

Russian officials deny their country is mounting a campaign against Germany. “These accusations are atrocious,” one Russian official told Reuters, pretending that on the contrary Moscow is the victim of an “indiscriminate information war” being waged from Germany.

Relations between the two countries are now at their lowest. Russia is using propaganda and made-up stories in order to discredit the West and its institutions.

Thus, in January, the Russian media fabricated a story about the alleged rape case of a 13-year-old German-Russian girl. She told police she had been kidnapped in Berlin by Muslim immigrants, who raped her while she was held for 30 hours. The story was widely spread by the Russian media and provoked a huge wave of indignation.

The story triggered widespread outrage in Russia after the country’s most watched television network, state-run Channel One, gave the rape allegation prominent place in a January 16 report by its Berlin correspondent, Ivan Blagoy.

Blagoy’s report quoted the girl’s relatives as saying that police had refused to launch criminal proceedings in an attempt to cover up the case, and had pressured the girl to say the sex was consensual.

Russian immigrant communities in Berlin and other German cities organized rallies to voice their anger. On January 23, some 700 people protested in front of German Chancellor Angela Merkel’s office, holding banners that read “Our children are in danger” and “Today my child, tomorrow yours.”

The flagrant deceit of the so-called “Lisa affair” shocked the German public. Russia had employed similar disinformation tactics in the war against Ukraine, but never in Germany. The German government accused the Russian media of “biased reporting” in the particular case of the girl, or on events such as the Ukraine crisis and reports on Russia’s neighbouring states and an alleged rape case involving a German-Russian girl.

The Berlin public prosecutor’s office later said a medical examination showed she had not been raped.

The case stirred concern among senior German officials that Russia was trying to erode public trust in Merkel using immigration, an issue that has already cost her support and caused tensions in the European Union.

At a meeting in Moscow on March 23, Russian Foreign Minister Sergei Lavrov irritated his German counterpart by raising again the case of the girl.

Germany’s Foreign Minister Frank-Walter Steinmeier was upset when Lavrov raised the issue again. “I can only hope that such incidents and difficulties, as we had in that case, aren’t repeated,” he told Reuters afterwards.

German and European officials say Russia’s aim is two-fold: To exaggerate the problems the migrant crisis is causing Germany and to push Germany to relax its backing for European sanctions on Russia over Moscow’s interference in Ukraine. While EU governments last month extended asset freezes and travel bans on Russians and Russian companies, there is less consensus on whether to prolong more far-reaching sanctions on Russia’s banking, defence and energy sectors from July.

Both sides agree on one point: relations between the two countries are at their lowest point since the early days of the Cold War. Russia’s campaign against Europe uses “trolls” who produce online hate speech and sow discord and doubt about news events. There are dozens of examples of Russian reporting on the migrant crisis that it says are clear cases of deliberate disinformation.

Moscow rejects the idea of any coordinated campaign. One Russian official told Reuters there was a German media campaign to paint Russia in a bad light and “demonize” it.

The Kremlin is also using far-right parties in Europe to sow discord among the EU countries. Thus Russia is using the Front National, the third largest political force in France, and other anti-EU parties as a vehicle to lobby its political interests in Europe. Marine Le Pen, whose party came first in European elections in May 2014 with 25 % of votes and obtained even more in the recent French local elections, has made no secret of her sympathy for Russian President Vladimir Putin. She also obtained a loan from a Russian bank.

One other example of ties with Moscow is the UK Independence Party, commonly known as UKIP, whose leader Nigel Farage’s appears very frequently on state-owned Russia Today and who is very criticised for his expression of open admiration for Vladimir Putin.

Also, the Italian Northern League’s leader, Matteo Salvini calls the euro a “criminal currency” and wants to demolish the Brussels consensus that has dominated European politics since the end of World War Two. Matteo Salvini is also an open admirer of Vladimir Putin and a friend of Marine Le Pen.Sigmar Gabriel, an SDP member and Germany’s Economy Minister, said recently that the EU should try to lift sanctions on Russia by this summer. Before the EU’s Ukraine-related sanctions, Russia accounted for 4% of German trade; that has fallen to 2.4%.

Merkel, though, has refused to ease the sanctions, insisting that Russia first needs to comply with an agreement to enforce a ceasefire, pull back heavy weapons, exchange prisoners, and hold internationally monitored local elections in eastern Ukraine. (with Reuters, AP)

The post Je t’aime moi non plus: new chill between Germany and Russia appeared first on New Europe.