Remembrance ceremony for the victims of MH17

Source: Government of the Netherlands – Press Release/Statement:

Headline: Remembrance ceremony for the victims of MH17

It is exactly a year since the MH17 air disaster that killed all 298 people on board, including 196 Dutch nationals. A remembrance ceremony for the victims was held this afternoon in Nieuwegein. The private gathering for family, friends and acquaintances was organised by a special working group.

Around 1,300 relatives, from the Netherlands and abroad attended the ceremony, which they themselves had put together. During the ceremony, the names of all the victims were read out.

Prime Minister Mark Rutte addressed the gathering on behalf of the government. Other government representatives invited by the working group included security and justice minister Van der Steur, foreign minister Koenders, interior minister Plasterk and environment minister Mansveld. Today, the Dutch flag will be flown at half-mast on the main government buildings in commemoration of the victims.

The prime minister ended his address with the words, ‘However you experience this moment, one thing is certain: the victims of MH17, your loved ones, will never be forgotten. I hope that this remembrance will be a source of hope and strength for you.’

‘Greece must act on commitments’, says Rutte

Source: Government of the Netherlands – Press Release/Statement:

Headline: ‘Greece must act on commitments’, says Rutte

Eurozone countries have agreed a deal setting out the conditions for further negotiations on a new package of financial assistance to Greece. Greece will have to implement further reforms and spending cuts.

Prime Minister Mark Rutte has said that Greece must act quickly to implement the agreed measures. ‘The financial and economic situation in Greece is getting worse by the day. Firm guarantees are needed to restore trust,’ he said.

The Greek parliament has until Wednesday to agree to the deal. ‘That means three things,’ said Mr Rutte. ‘First, Greece must pass four pieces of legislation by Wednesday at the latest. On VAT and pension reforms, for example. Second, the Greek parliament must agree to more rigorous proposals than were tabled earlier this month, on matters like the privatisation of energy operators and the modernisation of the labour market. Third, a number of extra measures must be taken, involving the sale of Greek state assets by an independent authority. The proceeds, which should eventually amount to €50 billion, can be used to reduce the Greek national debt more quickly. And Greece can also invest in its economy.’

In addition, the European Commission will oversee a programme to strengthen the Greek administration. This is a necessary step for crucial tasks like tax collection and the establishment of a land registry.

Mr Rutte emphasised that the measures are tough. ‘But they are necessary. They represent the only path to healthy Greek public finances and a reformed economy.’

Heads of Mission meet in Helsinki

Source: Government of Finland – Press Release/Statement:

Headline: Heads of Mission meet in Helsinki

Press release 150/2016

17.8.2016

The security situation in the Baltic Sea Region, terrorist attacks in Europe, the impacts of Brexit, new emerging markets, the implementation of the 2030 Agenda … These are among the topics of discussion, when the Heads of Finnish Missions abroad convene for their Annual Meeting in the Little Parliament in Helsinki next week.

Rapid changes characterise the international situation. The Ministry for Foreign Affairs is actively involved in different developments and works to the benefit of Finland the Finnish people.

The Annual Meeting of Heads of Mission will be organised on 22–25 August. Part of the programme is open to the public (see details below). The keynote speakers will include Minister for Foreign Affairs Timo Soini, Minister for Foreign Trade and Development Kai Mykkänen, Minister for Nordic Cooperation Anne Berner, Prime Minister Juha Sipilä, Minister of Finance Petteri Orpo and President of the Republic Sauli Niinistö. The meeting will be opened by Peter Stenlund, Secretary of State at the Ministry for Foreign Affairs.

Live webcasts of the speeches will be available at https://formin.videosync.fi/slsk2016. The meeting can be followed on Twitter using hashtag #slsk16.

Video recordings, speeches and press releases will be available afterwards on the Foreign Ministry’s website at http://formin.finland.fi. Photos can be viewed on Facebook at www.facebook.com/ulkoministerio.

Public programme of the meeting

Monday, 22 August

09.00–09.30

Opening of the meeting Secretary of State Peter Stenlund (public)

09.30–11.45

Speech by Minister for Foreign Affairs Timo Soini (public)  

Discussion (non-public)

11.00–12.15

Speech by Minister for Foreign Trade and Development Kai Mykkänen (public)

Discussion (non-public)

12.15–12.45

Speech by Minister for Nordic Cooperation Anne Berner (public)

Discussion (non-public)

13.30–14.30

Speech by Prime Minister Juha Sipilä (public)

Discussion (non-public)

Tuesday, 23 August

10.00–11.00

Speech by President of the Republic Sauli Niinistö (public) 

Discussion (non-public) 

It is important that Finland has its own network of diplomatic missions

Finland has 88 missions or offices around the world, to which the Ministry has posted about 550 staff from Helsinki. The missions also employ about 960 locally engaged staff.

Inquiries: Administrative Services of the Ministry for Foreign Affairs, tel. +358 50 322 2046.

The Foreign Ministry’s email addresses are in the format firstname.lastname@formin.fi.

Informal breakfast in the margins of the Foreign Affairs Council with U. S. Secretary of State, John Kerry, Monday 18 July

Source: Council of the European Union – Press Release/Statement:

Headline: Informal breakfast in the margins of the Foreign Affairs Council with U. S. Secretary of State, John Kerry, Monday 18 July

Justus Lipsius building – Brussels

  • 08.00 – 10.00  Informal breakfast
  • 10.15  Press conference by Federica Mogherini, High Representative of the Union, and John Kerry, U.S. Secretary of State (press room, level 00)

Access to the press room (level 00) will be subject to the following conditions:

  • 6-month badge (2nd semester 2016). Badges can be collected from 11 July at the JL accreditation desk.
  • Journalists without the above must send a written request by mail – deadline 14 July 17.00 – to press.centre@consilium.europa.eu, with a copy of their ID, a valid press card (if available) or a signed letter from their media confirming their professional status and that they are assigned to cover this event.
    No late request will be accepted.

Original documents need to be produced when collecting the badge.

Photos and video coverage of the event will be available for preview and download on http://tvnewsroom.consilium.europa.eu

Livestream on http://video.consilium.europa.eu

Remarks by President Donald Tusk at the EU-China summit in Beijing

Source: Council of the European Union – Press Release/Statement:

Headline: Remarks by President Donald Tusk at the EU-China summit in Beijing

Thank
you very much, especially for your hospitality. Premier Li, I am very pleased
to meet with you again for the 18th EU-China Summit! It is not the first time
we meet but it is our first meeting here in Beijing.

Today’s meeting
gives us the opportunity to demonstrate the strength of our Strategic
Partnership. Especially in these testing times, as EU and China have both a
stake in each other’s success.

The European Union welcomes China’s
Presidency of the G20 this year. You can count on the EU to play a constructive
role towards achieving a successful summit in Hangzhou. As two of the largest
economies in the world, the EU and China have an important stake, as well as
responsibility, in ensuring the growth and stability of the global economy.

The European Union looks forward to closely work with China to resolve
international conflicts and address foreign policy priorities. We have to
employ all existing channels in both the bilateral and in multilateral
contexts, such as the United Nations and the G20. Building on the positive
experience of the Iran nuclear talks, we are confident there is much we can
contribute to peace and prosperity around the world, especially in Syria, Iraq,
Afghanistan or Africa.

The same goes for global issues, like migration,
international development assistance, the environment and fighting climate
change. These are challenges that can only be resolved through a global
response. For this reason, a collaborative EU-China relationship is
crucial.

We came here to discuss common challenges, and to do so in a
friendly manner. One of those is the protection of the rule-based international
order. This may be the biggest challenge ahead of us. It is both in the Chinese
and European interest to protect international cooperation based on common
rules.

Let me just name one example: Globalisation. It brings so many
benefits to our nations. Unfortunately, more and more people feel that it is
happening without rules. And if we let these feelings grow, if many start
believing that globalisation and international trade are happening without or
against common rules, then the first victims will be the Chinese and European
economies, not to mention people. That is why we are so openly raising these
issues, because we believe a frank discussion is in our mutual interest.

As in every mature partnership we may sometimes have differences of opinion.
And being able to discuss these differences openly is part of the strength of
our relationship. This is the case, for example, with our discussion on human
rights and the rule of law. I stress the importance for the European Union of
the freedom of the press, the freedom of expression, association and assembly,
including for minorities. I hope that the next session of the human rights
dialogue will take place in November in Brussels.

Finally, on the South
China Sea we will see an important ruling today. Therefore let me repeat this:
The rule-based international order is in our common interest and both China and
the EU have to protect it, as this is in our people’s best interest.

I
am pleased, Mr Premier, that we have this timely opportunity to address our
substantial common agenda. Today’s summit should send a message to our people
and to the rest of the world of our joint commitment to our Strategic
Partnership. Thank you.

Remarks by J.Dijsselbloem following the Eurogroup meeting of 11 July 2016

Source: Council of the European Union – Press Release/Statement:

Headline: Remarks by J.Dijsselbloem following the Eurogroup meeting of 11 July 2016

Good evening everyone, thank you for joining us.

This was our first meeting since the UK referendum so when discussing the economic situation in the euro area we of course also focused on the effects of the outcome of the UK referendum, talked about market reaction, the impact in Europe and in the Eurozone in particular. Of course, there is a high degree of uncertainty at this point on what the economic impact will be, as well as what the political impact will be throughout the Eurozone area. But it doesn’t change our commitment to continue to work on sound growth-friendly fiscal policy, structural reforms, and sorting out the banking sector. Basically our agenda and our commitment to that agenda is unchanged.

On fiscal policies in specific we of course discussed Spain and Portugal following the recent Commission recommendations, or more specifically the recommended decisions by the Commission. I will not go into detail now given that we will discuss it at the Ecofin; it is an Ecofin decision. Let me just stress that the discussion is at this stage only about the question whether there is effective or ineffective action in Spain and Portugal. It was not on the follow-up decisions regarding sanctions, possible sanctions or the effect of actions this and in the coming years. So it was just about looking back. There was strong support for the two Commission recommendations today. We agreed that we should continue swiftly with the next steps in the procedures so that we give clarity and certainty to all involved as soon as possible.

We also briefly took stock of the latest post-programme surveillance (PPS). This was for Ireland and Portugal.

In Ireland, the good progress continues and there is no reason for great concern.

For Portugal, there are a few more concerns, risks in the economy and in the banking sector, which are acknowledged also of course by the Portuguese authorities. They are committed to work on that as well as to work on budgetary issues.

Both of these programmes will have another post-programme surveillance later on.

Finally we had a broad discussion on reducing barriers to investment, both on the public and private side. On the public side the discussion focused on the criteria for the investment clause, some statistical issues on how to deal with investments from public budgets. And on the private side we focused, on the basis of the paper the Commission prepared, on a couple of areas where work should be done to improve the efficiency of public administration, the business environment in our countries, and sector-specific burdens that hinder further private investments. More work will be done on that and we will continue on that topic later this year.

Excessive deficit procedure: Council finds that Portugal and Spain have not taken effective action

Source: Council of the European Union – Press Release/Statement:

Headline: Excessive deficit procedure: Council finds that Portugal and Spain have not taken effective action

On 12 July 2016, the Council found that Portugal and Spain had not taken effective action in response to its recommendations on measures to correct their excessive deficits

It confirmed that they will not have reduced their deficits below 3% of GDP, the EU’s reference value for government deficits, by the recommended deadline. And in both cases, it found the fiscal effort to fall significantly short of what was recommended. 

The Council’s decisions will trigger sanctions under the excessive deficit procedure. They are based on article 126(8) of the Treaty on the Functioning of the European Union. 

The Commission has 20 days to recommend further Council decisions imposing fines. Those fines should amount to 0.2% of GDP, though Portugal and Spain can submit reasoned requests within 10 days for a reduction of the fines. The Council will have 10 days to approve the fines. 

“I am sure that we will have a smart, intelligent result at the end”, said Peter Kažimír, minister for finance of Slovakia and president of the Council.

Portugal  

In April 2011 however, after several months of
market pressure on its sovereign bonds, Portugal requested assistance from
international lenders
. It obtained a €78 billion package of loans from the
EU, the euro area and the IMF. In October 2012, the Council extended the
deadline for correcting Portugal’s deficit by one year to 2014, in the light of
the recession that the country faced. 

Economic prospects deteriorated
further, and Portugal’s general government deficit reached 6.4% of GDP in 2012.
In June 2013, the Council extended the deadline for correcting the
deficit by another year, to 2015. It set headline deficit targets of 5.5% of GDP
in 2013, 4.0% of GDP in 2014 and 2.5% of GDP in 2015, consistent with 0.6%, 1.4%
and 0.5% of GDP improvements in the structural balance respectively. 

Portugal exited its economic adjustment programme in June 2014. 

However its general government deficit came out at 4.4% of GDP in 2015, and
the deadline was missed for correcting the deficit. The overshoot was
largely due to a financial sector support measure (resolution of Banif), though
the deficit net of one-off measures would in any case have been above 3% of GDP.
The cumulative improvement in Portugal’s structural balance in the 2013‑15
period is estimated by the Commission at 1.1% of GDP, significantly below
the 2.5% recommended by the Council. When adjusted in the light of revised
potential output growth and revenue windfalls or shortfalls, it is even slightly
negative. 

Overall, since June 2014 the improvement in Portugal’s
headline deficit has been driven by economic recovery and reduced
interest expenditure in a low-interest-rate environment. The country’s general
government gross debt has broadly stabilised. It amounted to 129.2% of GDP at
the end of 2013, 130.2% of GDP in 2014 and 129.0% of GDP in 2015, according to
the Commission’s spring 2016 economic forecast. 

The Council concluded
that Portugal ‘s response to its June 2013 recommendation has been insufficient. Portugal didn’t correct its deficit by 2015 as required,
and its fiscal effort falls significantly short of what was recommended by the
Council. 

Spain 

Spain has been subject to an excessive deficit
procedure since April 2009, when the Council issued a recommendation calling for
its deficit to be corrected by 2012. 

In December 2009 however, the
Council extended the deadline to 2013. The Commission forecast that Spain’s 2009
deficit would reach 11,2 % of GDP, five percentage points more than its previous
estimate. 

In July 2012, the Council extended the deadline for a further
year to 2014 on account of renewed adverse economic circumstances. The
Commission projected that Spain’s general government deficit would reach 6.3% of
GDP in 2012, compared to the 5.3% previously expected. 

Also in July
2012, the euro area member states agreed to provide up to €100 billion of loans
for the recapitalisation of Spain’s financial services
industry. 

In June 2013, the Council found that Spain fulfilled the
conditions for extending the deadline for correcting its deficit by a further
two years
, setting a new deadline of 2016. It set headline deficit targets
of 6.5% of GDP for 2013, 5.8% of GDP for 2014, 4.2% of GDP for 2015 and 2.8% of
GDP for 2016, consistent with 1.1%, 0.8%, 0.8% and 1.2% of GDP improvements in
the structural balance respectively. 

Spain exited the financial
assistance programme for the recapitalisation of its financial institutions in
January 2014. It had used close to €38.9 billion for bank recapitalisation, plus
around €2.5 billion for capitalising the country’s asset management
company. 

Spain’s general government deficit amounted to 5.9% of GDP in
2014 and 5.1% of GDP in 2015. above the intermediate targets set by the Council.
A relaxation of fiscal policy in 2015 had a large impact on the fiscal
outcome. The cumulative improvement in the structural balance over the 2013‑15
period amounted to 0.6% of GDP, significantly below the 2.7% recommended
by the Council. When adjusted in the light of revised potential output growth
and revenue windfalls or shortfalls, it is even lower. 

Over the 2013‑15
period, low or even negative inflation made achievement of the fiscal targets
more difficult, but this was largely offset by higher-than-expected real GDP
growth. A low interest rate environment has also helped Spain reduce its
deficit. The Commission’s 2016 spring economic forecast projects a general
government deficit of 3.9% of GDP in 2016 and 3.1% of GDP in 2017. Spain is
therefore not set to correct its deficit in 2016 as required. The
debt-to-GDP ratio declined from 99.3% in 2014 to 99.2% in 2015, thanks to sales
of financial assets. According to the Commission’s 2016 spring forecast, the
debt ratio is expected to rise to 100.3% in 2016 and decline thereafter. 

The Council concluded that Spain ‘s response to its June 2013 recommendation
has been insufficient. Spain didn’t reach the intermediate target set for
its headline deficit in 2015 and is not forecast to correct its deficit by 2016
as required. Its fiscal effort falls significantly short of what was recommended
by the Council, and it even relaxed its fiscal stance in 2015. 

Economic, employment and fiscal policies: Council issues country-specific recommendations

Source: Council of the European Union – Press Release/Statement:

Headline: Economic, employment and fiscal policies: Council issues country-specific recommendations

 On 12 July 2016, the Council issued recommendations on economic, employment and fiscal policies planned by the member states. 

The Council thereby concluded the 2016 “European Semester”, an annual policy monitoring process. The European Council endorsed the recommendations at its meeting in June. 

“We look forward to the effective implementation of these country-specific recommendations in the coming months“, said Peter Kažimír, minister for finance of Slovakia and president of the Council. 

In March 2016, the European Council endorsed the following priorities: 

  • relaunching investment;
  • pursuing structural reforms to modernise European economies;
  • conducting responsible fiscal policies.

Monitoring policies 

The European Semester involves simultaneous monitoring of member states’ economic and fiscal policies during a roughly six-month period every year. 

In the light of policy guidance given by the European Council annually in March, the member states present each year in April: 

  • National reform programmes for their economic and employment policies. These set out a macroeconomic scenario for the medium term, national targets for implementing the “Europe 2020” strategy for jobs and growth, identification of the main obstacles to growth, and measures for growth-enhancing initiatives in the short term. 
  • Stability or convergence programmes for their fiscal policies. Eurozone countries present stability programmes, whereas non-euro member states present convergence programmes. These set out medium-term budgetary objectives, the main assumptions about expected economic developments, a description of fiscal and economic policy measures, and an analysis of how changes in assumptions are susceptible to affect fiscal and debt positions. 

The Council then adopts country-specific recommendations (CSRs). It provides explanations in cases where the recommendations do not correspond with those proposed by the Commission. 

Recommendations 

The 2016 CSRs are addressed to 27 of the EU’s 28 member states. To avoid duplication there is no CSR for Greece, as it is subject to a macroeconomic adjustment programme. 

In March 2016, the Council adopted a specific recommendation on the economic policies of the euro area. It did so at an earlier stage than in previous years, to take greater account of eurozone issues when approving the recommendations for the eurozone member states.

The recommendations were adopted at a meeting of the Economic and Financial Affairs Council. 

Corporate tax avoidance: New rules adopted

Source: Council of the European Union – Press Release/Statement:

Headline: Corporate tax avoidance: New rules adopted

On 12 July 2016, the Council adopted new rules addressing some of the practices most commonly used by large companies to reduce their tax liability. 

The directive is part of a January 2016 package of Commission proposals to strengthen rules against corporate tax avoidance. The package builds on 2015 OECD recommendations to address tax base erosion and profit shifting (BEPS), endorsed by G20 leaders in November 2015. 

“This new directive aims to protect our domestic corporate tax bases against aggressive tax planning practices that directly affect the functioning of the internal market”, said Peter Kažimír, minister for finance of Slovakia and president of the Council. “It is therefore an important step, which also demonstrates that we see the fight against such practices not only as our common priority but also our common commitment.“ 

The directive addresses situations where corporates, mostly multinational groups, take advantage of disparities between national tax systems in order to reduce their tax bills. It responds to the perception of many taxpayers and SMEs that some multinationals do not pay their fair share of tax, thereby distorting tax competition within the EU’s single market.

New provisions in five areas 

The directive covers all taxpayers that are subject to corporate tax in a member states, including subsidiaries of companies based in third countries. It lays down anti-tax-avoidance rules for situations that may arise in five specific fields: 

  • Interest limitation rules. Multinational groups may artificially shift their debt to jurisdictions with more generous deductibility rules. The directive sets out to discourage this practice by limiting the amount of interest that the taxpayer is entitled to deduct in a tax year.
  • Exit taxation rules, to prevent tax base erosion in the state of origin. Corporate taxpayers may try to reduce their tax bills by moving their tax residence and/or assets, merely for aggressive tax planning purposes.
  • General anti-abuse rule. This rule is intended to cover gaps that may exist in a country’s specific anti-abuse rules, and thereby enable tax authorities to deny taxpayers the benefit of any abusive tax arrangements that may occur.
  • Controlled foreign company (CFC) rules. In order to reduce their overall tax liability, corporate groups can shift large amounts of profits towards controlled subsidiaries in low-tax jurisdictions. CFC rules reattribute the income of a low-taxed controlled foreign subsidiary to its – usually more highly taxed – parent company.
  • Rules on hybrid mismatches. Corporate taxpayers may take advantage of disparities between national tax systems in order to reduce their overall tax liability, for instance through double deductions. 

A common EU approach 

The directive will ensure that the OECD anti-BEPS measures are implemented in a coordinated manner in the EU, including by 6 member states that are not OECD members. 

Three of the five areas covered by the directive implement OECD recommendations, namely the interest limitation rules, the CFC rules and the rules on hybrid mismatches. The two others, i.e. the general anti-abuse rule and the exit taxation rules, deal with anti-tax-avoidance aspects of a 2011 proposal for an EU common consolidated corporate tax base. 

Implementation 

The directive was adopted without discussion at a meeting of the Economic and Financial Affairs Council. Political agreement was reached on 17 June 2016, following a silence procedure. 

The member states will have until 31 December 2018 to transpose it into their national laws and regulations, except for the exit taxation rules, for which they will have until 31 December 2019. Member states that have targeted rules that are equally effective to the interest limitation rules may apply them until the OECD reaches agreement on a minimum standard, or until 1 January 2024 at the latest. 

Other initiatives 

Work has proceeded meanwhile on the rest of the January 2016 anti-tax-avoidance package. On 25 May, the Council approved: 

  • a directive on the exchange of tax-related information on multinational companies;
  • conclusions on the third country aspects of tax transparency. 

The anti-tax-avoidance package follows on from a number of EU initiatives in 2015. These include a directive, adopted in December 2015, on cross-border tax rulings

In December 2014, the European Council cited “an urgent need to advance efforts in the fight against tax avoidance and aggressive tax planning, both at the global and EU levels”.

EU and Monaco sign deal on automatic exchange of tax data

Source: Council of the European Union – Press Release/Statement:

Headline: EU and Monaco sign deal on automatic exchange of tax data

On 12 July 2016, the European Union and Monaco signed an agreement aimed at improving tax compliance by private savers. 

The agreement will contribute to efforts to clamp down on tax evasion, by requiring the EU member states and Monaco to exchange information automatically. 

This will allow their tax administrations improved cross-border access to information on the financial accounts of each other’s residents. 

Upgrade 

The agreement upgrades a 2004 agreement that ensured that Monaco applied measures equivalent to those in an EU directive on the taxation of savings income. The aim is to extend the automatic exchange of information on financial accounts in order to prevent taxpayers from hiding capital representing income or assets for which tax has not been paid.

The text was signed in Brussels: 

  • on behalf of the EU, by Peter Kažimír, minister for finance of Slovakia and president of the Council;
  • on behalf of Monaco, by Serge Telle, minister of state.

 The signature took place in the presence of Pierre Moscovici, commissioner for economic and financial affairs, taxation and customs, who also signed the document. 

The Council adopted a decision on 12 July 2016 to authorise the signature on behalf of the EU. 

The EU and the OECD 

The agreement ensures that Monaco applies strengthened measures that are equivalent to measures in force in the EU. However, whereas the 2004 agreement was based on the EU’s taxation savings directive, that directive has now been repealed. Directive 2003/48/EC was repealed in November 2015 in order to eliminate an overlap with directive 2014/107/EU, which includes strengthened provisions to prevent tax evasion. 

The agreement also complies with the automatic exchange of financial account information promoted by a 2014 OECD global standard

The EU signed similar agreements with Switzerland on 27 May 2015, Liechtenstein on 28 October 2015, San Marino on 8 December 2015 and Andorra on 12 February 2016. It approved the conclusion of the agreements with Switzerland and Liechtenstein on 8 December 2015 and San Marino on 16 April 2016. 

Coverage 

The agreement sets out to limit the opportunities for taxpayers to avoid being reported to the tax authorities by shifting assets. Information to be exchanged concerns not only income such as interest and dividends, but also account balances and proceeds from the sale of financial assets. 

Tax administrations in the member states and in Monaco will be able to: 

  • identify correctly and unequivocally the taxpayers concerned;
  • administer and enforce their tax laws in cross-border situations;
  • assess the likelihood of tax evasion being perpetrated;
  • avoid unnecessary further investigations.

 The EU and Monaco must now ratify or approve the agreement in time to enable its entry into force. The parties will strive to enable entry into force on 1 January 2017