By Mehreen Khan in London
The International Monetary Fund’s latest recommendations on Greek debt relief have leaked.
Yesterday, ahead of the latest meeting of eurozone finance ministers on May 24, the IMF repeated it would take part in Greece’s €86bn bailout only if its European partners could prove “the numbers add up”.
A key part of this calculation is for the fund to be fully assured that Greece’s debt mountain is finally placed on a sustainable downward trajectory. Read more
Mr Moscovici, right, chats with Mr Juncker. He will present the new tax measures next week.
Next week, the European Commission will take its latest step in its ongoing quest to move beyond the LuxLeaks corporate tax avoidance scandal that has periodically dogged President Jean-Claude Juncker.
Pierre Moscovici, the EU’s tax policy chief, is set to unveil a flurry of proposals aimed at tackling so-called base erosion and profit shifting: in other words the aggressive tactics used by multinationals to shrink their tax bills by as much as possible. This morning, we’ve done a story about the new proposals, which we obtained. But we’ve also now posted them here for others to read.
The so-called LuxLeaks revelations emerged shortly after Mr Juncker became commission president in November 2014, and dogged his early days in office. They documented how during his two decades as Luxembourg prime minister, up to 340 multinational companies, ranging from Ikea to Pepsi, funnelled profits through the tiny country to lower their tax bills to as little as 1 per cent.
The commission has embarked on a wave of regulatory changes to close loopholes, including making a renewed push for the longstanding EU goal of having a common consolidated corporate tax base for companies. It is also pursuing high profile competition cases against tax deals Luxembourg and others struck with multinationals such as Apple, Amazon and Fiat.
Most recently, the European Commission ordered Belgium to recoup about €700m from 35 multinational companies that have benefited from the country’s generous fiscal incentive scheme.
Mr Moscovici’s plans, which are outlined in a 13-page summary posted here, enshrine international agreements reached by the Organization for Economic Cooperation and Development into EU law, and in some cases go even further – notably when it comes to restricting the ability of companies to shift of profits from parent companies to lightly taxed subsidiaries. Read more
The discussions held on Saturday and Sunday among eurozone finance ministers exposed fissures between one group of European governments that have lost almost all faith in the radical leftist-led government of Alexis Tsipras, Greece’s premier, a second group that contends it is time to cut Greece some slack and move on with another rescue programme, and a third group that straddles the first two.
Nevertheless, the important point is that impatience with the Syriza-dominated government in Athens is not so deep and universal that a consensus exists to prepare the ground for a Greek exit from the eurozone, with all its unpredictable economic, financial and geopolitical implications. In this respect the opposition of France and Italy, and of the European Commission, to such a step is proving to be decisive. Read more
The Franco-German contribution ahead of today's Brussels meeting contains little detail
When eurozone leaders decided last year it was time for another look at overhauling their common currency, the main driver was Mario Draghi, the European Central Bank chief who has been one of the main figures behind the push to make the eurozone a more fully integrated and centralised union.
But in the months since a Draghi-backed decision for the eurozone’s four presidents – the heads of the European Commission, European Council, eurogroup and ECB – to present another blueprint on the way forward at June’s EU summit, the appetite among political leaders for a step change, always lukewarm, has cooled even more.
If documents sent around to national capitals in recent days ahead of Tuesday’s Brussels meeting of EU “sherpas” – the top EU advisers to all 28 prime ministers – are any indication, the report being pulled together may propose little more than a bit of euro housekeeping in the near term. Although more ambitious plans could be included, the leaked documents show they will be relegated to the medium and long term – a tried and true EU tradition that is normally a recipe for bureaucratic burial.
Among the documents obtained by the Brussels Blog are a three-page summary of what the new report will look like (posted here) as well as a Franco-German contribution (the French version is here) and that of the Italian government (conveniently in English, here).
Although the Italians emerge as the most ambitious reformers of the lot, the “note for discussion by sherpas” makes pretty clear that the measures being contemplated for immediate action are the leftovers from recent reform efforts – streamlining and clarifying the EU’s crisis-era budget rules, for instance, and adding a bit more financial heft to the EU’s bank bailout fund. Read more
The European commission, the European Union’s executive arm, has been one of the staunchest supporters of the proposed Nabucco pipeline, a 3,900-kilometer behemoth that would carry natural gas from the Caspian region to Austria.
For the commission, Nabucco represents the backbone of a new southern corridor that would break Europe’s dependence on imported Russian gas. It has touted the project repeatedly over the years, and has also opened its wallet, committing up to €200m in funding.
But in a recent conversation with Brussels Blog, Gunther Oettinger, the energy commissioner, made a departure from the usual script and gave support to the growing suspicion that the full Nabucco may be a lost cause. Read more
The European Union is nothing if not addicted to targets. Promises to achieve particular goals by specific dates are part and parcel of the EU’s daily business. Sometimes the objectives are met, sometimes they are not met, and sometimes it’s hard to tell either way. European monetary union, for example, was launched in 1999, but only after a two-year delay because a majority of member-states didn’t meet the criteria earlier in the decade (did Greece ever meet them?). Read more
Apart from wars and economic slumps, nothing divides Europeans as much as the Eurovision Song Contest.
This annual televised orgy of glitzy musical mediocrity is now in its 55th year. Good God, it is even older than the European Union’s 1957 founding Treaty of Rome! The years have truly taken their toll. Some would say the last memorable winning song was “Waterloo” by Sweden’s Abba in 1974. Still, this year’s final, to be staged in Oslo on Saturday, is as certain as previous spectacles to hold millions of viewers spellbound. It would have been no different 2,000 years ago if a multinational gladiatorial contest had been broadcast from Rome’s Colosseum to the rest of Europe. Read more
As you’d expect, European Union leaders were quick to congratulate David Cameron on his appointment as British prime minister. But for all the warm words, they will be watching his first moves on the European stage like hawks.
An important test will come next week at a meeting of EU finance ministers in Brussels. There the UK will find itself under pressure from a majority of countries to agree to new arrangements tightening the regulation of hedge funds and private equity. Spain, which holds the EU’s rotating presidency, is desperate to get the deal done next week, having helped out Gordon Brown’s Labour government by delaying it until the British election was out of the way. But will the new Conservative-Liberal Democrat coalition be inclined to sign up to such an important measure so soon into its period of office? Read more
Yulia Tymoshenko’s refusal to acknowledge Viktor Yanukovich as the legitimate winner of Ukraine’s presidential election is starting to embarrass her friends in the European Union. The White House, Nato and the EU have all congratulated Yanukovich on his victory. The longer Tymoshenko maintains her defiant stance, the more it will cost her in terms of prestige and contacts in Europe.
Only last December I saw the red carpet rolled out for Tymoshenko at a congress in Bonn of the centre-right European People’s Party, the biggest party in the European Parliament. Everyone was there – German chancellor Angela Merkel, EU president Herman Van Rompuy, French premier François Fillon, Italian premier Silvio Berlusconi, etc. Tymoshenko was one of the star attractions from the “new” eastern Europe. Read more
There is a need to clear up some misconceptions about how Greece, or some other fiscal miscreant in the 16-nation eurozone, would be rescued by its partners in the event that it was unable to refinance its debts.
Quite a few commentators seem to think eurozone governments would find it hard to sidestep the ban on bail-outs specified in European Union treaty law. The European Central Bank, the European Commission and certain EU governments, not least that of Greece itself, have contributed to the confusion by insisting in public that a rescue is undesirable and unnecessary (while quietly planning for precisely this contingency). Read more
Tuesday’s murder of Bobi Tsankov, a young Bulgarian journalist who wrote about his country’s over-mighty gangsters, took place in broad daylight in a crowded street in the centre of Sofia. As a statement about the power of organised crime in Bulgaria, it could hardly have been more explicit.
Moreover, it could hardly have come at a worse time for Prime Minister Boyko Borissov’s government. Borissov came to power in July facing the arduous task of regaining the trust of Bulgaria’s European Union partners. Some of them bitterly regretted their decision to let Bulgaria join the EU in 2007 before it had properly confronted the scourge of organised crime. A 2008 European Commission report on Bulgaria’s progress in tackling corruption and organised crime was, in my view, the most negative ever produced about a EU member-state. Read more
Herman Van Rompuy, the European Union’s first full-time president, is getting down to business. Hitting the ground running? Not exactly. But in various subtle ways the mild-mannered, philosophically inclined former Belgian premier is already making an impact on the way the EU goes about its work.
On Monday, his first official working day, he announced that he was summoning all 27 EU heads of government to Brussels on February 11 for an unscheduled summit on economic policy. This statement didn’t attract much attention, because plans for such a summit were being laid even before Christmas. But the announcement was significant nonetheless. Chairing summits is one of the few duties that the EU’s Lisbon treaty specifically reserves to the full-time president. By calling an unscheduled summit, Van Rompuy was signalling to the world that he intends to use his presidential authority to the full. Read more
Seen from continental Europe, one of the biggest questions of 2010 concerns David Cameron, leader of the UK’s opposition Conservative party. The Tories are widely expected to win the forthcoming British election, but few European Union politicians can claim with confidence to know where he truly stands on the all-important matter of Britain’s relationship with the EU.
The lack of clarity isn’t helped by the Tories’ distant relationship with their fellow EU centre-right parties. I am in Bonn at a congress of the European People’s Party, the leading centre-right party group. Everyone who matters is here: Germany’s Angela Merkel, Italy’s Silvio Berlusconi, Herman Van Rompuy (the newly appointed full-time EU president)… Countries from Malta to Latvia and Georgia to Croatia are represented. But there are no Conservative party politicians at all here – not Cameron, not William Hague, his shadow foreign secretary, not Kenneth Clarke, the only authentically pro-EU voice in the shadow cabinet. Read more
Next week’s summit of European Union leaders faces an important choice on Turkey. Should the EU toughen existing measures that are holding up Turkey’s EU accession talks, because of Ankara’s refusal to open its ports and airports to Greek Cypriot traffic? Or should the EU recognise that this would send completely the wrong message, just when Greek Cypriot and Turkish Cypriot leaders are trying to reach a comprehensive settlement of the long-standing Cyprus dispute?
Precisely because the EU is divided on the Turkish question – the Greek Cypriot-run government of Cyprus wants a strong line, and other countries are split between supporters and opponents of Turkey’s entry into the EU – it seems unlikely that a consensus can be reached in favour of placing additional obstacles in the path of Turkey’s negotiations. Read more
There are all sorts of threats to the European Union’s unity, but something tells me that the biggest threat isn’t the Visegrad group. This appears to be a view not shared by President Nicolas Sarkozy of France.
Speaking after the October 29-30 EU summit in Brussels, Sarkozy criticised the fact that the leaders of the four Visegrad countries – the Czech Republic, Hungary, Poland and Slovakia – had held a pre-summit meeting to co-ordinate their positions. “If they were to meet regularly before each Council, that would raise some questions,” Sarkozy said. Read more
Every now and then, I’m asked in Brussels whether the opposition British Conservative party’s hostility to the European Union is related to the fact that so many of its top people – including David Cameron, likely to be the UK’s next prime minister – went to Eton. The theory is that they’re so snooty and cut off from the lives of ordinary Britons that they’ve lost all sense of what’s in the national interest.
Well, it’s always tempting to have a rant about privilege. But in this case, the verdict on Eton is “not proven”. Read more
According to an opinion poll, more than half of Denmark’s population has little or no confidence that world leaders will strike an agreement on fighting climate change at December’s landmark United Nations summit in Copenhagen. It is just a hunch, but I reckon one impulse behind this pessimism is the widespread European suspicion that China, which recently overtook the US as the world’s biggest greenhouse gas emitter, will play an unconstructive role at the talks.
What if this suspicion is unfounded? Read more
The great thing about blogging is that you learn something new almost every day. This morning, while preparing a blog on the European Union’s foreign policy, I have learnt the French expression avaler des couleuvres, which translates literally as “to swallow grass snakes” and means “to believe anything you’re told”.
What a magnificent idiom! I came across it in the widely followed Coulisses de Bruxelles blog of Jean Quatremer, the Brussels correspondent of the French daily Libération. Quatremer was writing about Javier Solana’s decision to give up his job as the EU’s foreign policy high representative, a post he has held since 1999. Read more
Say what you like about Nicolas Sarkozy, he certainly knows how to capture your attention. At a meeting in the Elysée Palace last week with Israeli Prime Minister Benjamin Netanyahu, it appears that the French president recommended in no uncertain terms that Avigdor Lieberman, the hardline foreign minister, should be dropped from the Israeli cabinet and replaced with Tzipi Livni, the less abrasive opposition leader.
“Grave and unacceptable!” fumed Lieberman’s spokesman – how dare the leader of one democracy interfere in the internal affairs of another? Read more
I was in Stockholm this morning when the happy news arrived that Germany’s constitutional court had given the green light in principle to the European Union’s Lisbon treaty. I call the news “happy” not because I am biased in favour of Lisbon, but because it meant that for once the task of writing about the treaty fell to someone else at the Financial Times (on this occasion, my Berlin-based colleague Bertrand Benoit).
The EU’s masochistic efforts at institutional reform, encapsulated in the Lisbon treaty, were one of the first things I wrote about when I arrived in Brussels in 2007. Two years later, I find that the subject refuses to go away, seeping into my daily work like a sewage leak in a cellar (a domestic problem familiar to house-dwellers in low-lying Brussels). All the more maddening is the knowledge that almost no one in the outside world cares one stale fig about the treaty. Read more