European Union

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.

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Amid the doom and gloom surrounding the eurozone’s continued inability to shake off the funk that set in after the sovereign debt crisis started six years ago, policymakers have recently been able to latch on to a bit of sunshine that Brussels has dubbed “temporary tailwinds”. These “tailwinds” are not the kind of good news normally associated with a strong economic recovery, such as companies expanding or workers’ wages increasing. Instead, they’re called “tailwinds” because they make it easier for those things to start happening – a little wind at the back of those thinking about investing in a new plant or hiring more people.

For the eurozone, these tailwinds take three forms: lower oil prices, which fatten the wallets of consumers and energy-intensive industries; a weak euro, which makes European products cheaper to sell overseas; and “accommodative” monetary policy, which lowers interest rates and makes it cheaper for investors to borrow money and build things.

There’s nothing much EU policymakers can do to affect the price of oil, though lifting Iranian sanctions has contributed to the perception the world is now awash with supplies. But yesterday Mario Draghi, the European Central Bank president, did a whole lot for the other two “tailwinds” with just a few sentences of central-bank-ese. First, he described “heightened uncertainty about emerging market economies’ growth prospects, volatility in financial and commodity markets, and geopolitical risks” – by which he mostly meant recent market upheaval in China. He also noted that eurozone inflation, which is supposed to be running at about 2 per cent each year, remained “weaker than expected”. Then he unleashed the sentence that got everyone really excited: “It will therefore be necessary to review and possibly reconsider our monetary policy stance at our next meeting in early March.” Which means that his already-accommodative monetary policy is likely to get even more accommodative in just a few weeks.

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Explainer: why everyone is giving Poland a hard time

Kamil Zwolski, University of Southampton

Since coming into power at the end of October 2015, Poland’s new, right-wing government has caused a stir at home and drawn international criticism.

Hardly a day passes at the moment without EU officials or European leaders questioning decisions made by the government.

In its analysis, Der Spiegel warns against Poland’s “creeping autocracy”. Some observers have even compared the situation in Poland to Putin’s Russia. While such comparisons are exaggerated, there are serious questions to ask about the Polish government’s commitment to the principles of liberal democracy.

Poland has been praised for years for its successful transition from communist state to liberal democracy. Now, it is the subject of criticism, worry and disappointment. What happened?

After eight years in power, the centre-right, pro-EU and relatively moderate Civic Platform government lost the 2015 presidential and parliamentary elections. In its place came the nationalistic, conservative and EU-sceptic Law and Justice (PiS) party, led by Jarosław Kaczyński, the twin brother of former president Lech Kaczyński, who died in a plane crash in 2010.

Changing the rules overnight

Things quickly changed after the election. Kaczyński appointed Beata Szydło as prime minister but it is clear that he pulls all the strings. For his part, president Andrzej Duda appears to be limited in his role to formally approving whatever the parliament (i.e. Kaczyński) throws his way.

Under the auspices of this peculiar administrative set up, the parliament has set about making drastic reforms at breakneck speed. Laws are changed overnight and without consultation. Critical voices are summarily ignored.

Szydlo and Kaczynski. One of them is Prime Minister, but no one can remember which.
Reuters/Kacper Pempel

So far, the parliament has significantly curtailed the powers of the national constitutional tribunal, which is supposed to impose judicial checks on the government. Another law seeks to curtail the freedom of the press by allowing the government to appoint the heads of media organisations.

Next on the list is foreign policy. The government is still in the process of developing plans on this front but it is already facing a predicament. On one side, the new government dislikes Russia, and on the other, it is increasingly fed up with the EU. The two positions are not particularly compatible.

The bear or the overbearing?

Poland has traditionally been sceptical of Russian foreign policy. While Western European countries, notably Germany, have been forging political and economic links with post-Soviet Russia, Poland has been working hard to join NATO, the EU, and to nurse the independence of the post-Soviet republics.

The wars in Georgia and Ukraine have proved to Poland’s elites that their concern was justified. Under Putin, Russia’s neighbours would have to watch their borders.

However, Poland is strongest as part of a team. It relies on its more powerful EU partners on the international stage and would struggle alone. When introducing the proposal for the EU’s Eastern Partnership programme, Poland worked together with Sweden. In the Ukrainian conflict, Poland accepted the leadership role of Germany.

It is unclear whether the new government appreciates this. On one hand, the anti-Russian sentiment seems to run deeper than ever. This government seems to be more emotional and less pragmatic about the relationship than its predecessors. This is fuelled by the widespread belief among PiS politicians and supporters that the 2010 crash that killed president Kaczyński was Russian sabotage, rather than a tragic accident.

On the other hand, Poland’s new government is deeply eurosceptic. It is particularly suspicious of Brussels and Berlin. The liberal EU arguably presents a threat to Catholic, conservative, Polish values.

There are longstanding tensions between Poland and Germany stemming from their difficult history but there is now resentment over Germany’s desire for Poland to remain a pro-EU, liberal democracy.

And grumbles about Brussels’ alleged interfering on issues such as gay rights have grown to alarm as the migration crisis has worsened. Pressure to take in refugees from Syria has not gone down well and Kaczyński is more often to be found siding up with Viktor Orbán, Hungary’s notoriously anti-immigrant prime minister, than Poland’s western EU partners.

While EU sanctions against Poland are unlikely, there are informal ways in which Brussels and EU leaders can seek to influence Poland. They might, for example, apply pressure to the EU funding channelled to Poland. And of course, they could remind Poland of its desire for European solidarity in support of Ukraine.

This is the dilemma for the Polish government. How can it be anti-Russian and anti-EU at the same time? Where will it seek allies? Kaczyński has always been fond of Orbán and the sympathy seems mutual, confirmed by their recent meeting.

But Orbán is famous for his pro-Putin policy. PIS is uncomfortable when confronted with this fact. Washington is only interested in supporting Poland as a pinnacle of liberal democracy in the region and a committed EU member. What are the options then? Either way, the current policy is bound to crash.

Kamil Zwolski, Lecturer in Global Politics and Policy, University of Southampton

This article was originally published on The Conversation. Read the original article.

The post Poland’s inevitable foreign policy crash appeared first on Ideas on Europe.

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EU-Lebanon relation is laid down in the Association Agreement which was adopted in 2002, entered into force on 1 April 2006 and open the way to fully incorporate Lebanon into the European Neighbourhood Policy (ENP).

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AMENDMENTS 1 - 270 - Draft motion for a resolution on the 2015 Report on the former Yugoslav Republic of Macedonia
Committee on Foreign Affairs

Source : © European Union, 2016 - EP

Today I met with Prime Minister of Lebanon Tammam Salam to prepare for the upcoming London Conference, "Supporting Syria and the region", on 4 February. We discussed topics of common concern, such as the impact of the refugee crisis, the  joint fight against terrorism, and the Syria crisis.

The European Union is committed to support Lebanon to sustainably address the consequences of the Syrian crisis. Ahead of London, we agreed with Prime Minister Salam to do more to address the needs of refugees and host communities. This includes by creating job opportunities and providing education, offering greater hope for the future.

The European Union also appreciates Lebanon's efforts in countering violent extremism and fighting terrorism, particularly in the light of the brutal terrorist attacks in Beirut of 12 November. I hope that the EU and Lebanon will be able to further strengthen our cooperation. The upcoming counter-terrorism Dialogue in Beirut is an important opportunity to do so.

I expressed to the Prime Minister our appreciation for his commitment and efforts to govern in such challenging times. I also renewed our call on all political forces to elect a new President and foster reforms to strengthen democracy, justice and the rule of law.

The European Union is committed to working with Lebanon, especially during challenging times. We will continue our joint efforts to make the EU-Lebanon partnership stronger.

Commission v Cyprus
Freedom of movement for persons
Cypriot legislation on pension entitlement which places migrant workers at a disadvantage in relation to those who do not leave Cyprus is contrary to EU law

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Austria's Faymann, left, with Merkel and Turkish prime minister Ahmet Davutoglu in November

Germany has received the most attention and Hungary the most denunciation, but in many ways it has been the country in between that has served as the bellwether of Europe’s ongoing refugee crisis. Back in September, Austria became one of the first countries along the “Western Balkan route” to find itself awash in migrants after Germany unexpectedly announced it was re-imposing checks on its southern border. A month later, it became the first country inside the EU’s passport-free Schengen zone to reconstruct fences at the border with another Schengen member, neighbouring Slovenia. Then last week it started turning away asylum seekers – though only those who admitted they were trying to get to Scandinavia.

But yesterday, the Austrian government may have taken its most significant step yet by announcing it would cap the number of asylum claims it will accept. Werner Faymann, the Austrian chancellor, said the country would only allow 37,500 to be admitted this year, down from 90,000 who applied for asylum status in 2015. Over the next four years, the limit will be 127,500. “We cannot in Austria take in all asylum seekers,” Mr Faymann said in Vienna. Frankfurter Allegemeine Zeitung has this excellent analysis piece that points out Mr Faymann long resisted such a cap, but was forced into the announcement by mounting pressure from within his own government.

The move raises serious legal questions, since the Geneva Convention on refugees – of which Austria is a founding signatory – prevents countries from expelling asylum seekers without a hearing, unless they can find a reason on national security grounds. Asked if the European Commission had come to a legal opinion on such quotas, a spokeswoman said it hadn’t – though only because up to now no country had sought such caps. But she hinted Geneva, which is incorporated into EU law, could present a roadblock. “We don’t practice pushbacks, we do not turn away people without first assessing their asylum applications on an individual basis, and this is the process that’s carried out across the EU,” said Natasha Bertaud, the commission’s spokeswoman on refugee issues.

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