European Union

France v Commission
State aid
The General Court annuls the Commission’s decision classifying the unlimited implied guarantee granted by the French State to the Institut français du pétrole (French Petroleum Institute) as State aid

On 25 May 2016 Lebanon enters its third year without a President. The sovereignty, stability, territorial integrity and independence of Lebanon are important for the European Union. Lebanon remains an example of freedom, diversity and tolerance for the region, but the prolonged political crisis can only further weaken the country and its institutions in facing its many challenges. Lebanon cannot afford to wait for the region to solve its problems before it addresses this issue.

The EU again urges Lebanese political forces and all stakeholders to put partisan and individual interests aside and find a viable compromise to elect a President swiftly. The EU supports the efforts deployed by the Lebanese government under difficult circumstances to ensure that issues of dissent do not hinder completely the functioning of Lebanese Institutions, and do not compromise the delivery of international assistance. In this context the EU commends the Lebanese Armed Forces' work for the safety and security of the country. The National Dialogue and other mediation efforts are laudable initiatives to ensure communication between political forces and prevent a deterioration of the political climate. The EU welcomes the holding of the Municipal elections and the Parliamentary by-elections for a vacant Parliamentary seat, and calls on all parties to create the conditions for the holding of Parliamentary elections.

The EU is fully aware of the additional challenges that the refugee crisis poses for the stability of Lebanon. The EU commends the Lebanese people for their efforts to host refugees fleeing the conflict in Syria, and stresses the importance of respect by all parties of the right to safe and voluntary return of refugees displaced from Syria. As demonstrated by the EU's pledge at the London Conference and its initial implementation, the EU and its Member States are committed to supporting Lebanon, its host institutions and public services in addressing the growing needs of all vulnerable host communities and refugees.  The EU welcomes Lebanon's Statement of Intent presented at the London Conference, and fully supports its implementation.

The EU reiterates its commitment to the partnership with Lebanon, and reaffirms the need to work together to respond to common challenges on the basis of our common values, including human rights, democracy, and respect for diversity.

Japanese Prime Minister Shinzo Abe, European Council President Donald Tusk, European Commission President Jean-Claude Juncker, French President François Hollande, German Chancellor Angela Merkel, Italian Prime Minister Matteo Renzi and UK Prime Minister David Cameron, made the following joint statement in the margins of the G7 Summit in Ise-Shima:

“We, the Leaders of Japan, the European Union, France, Germany, Italy and the United Kingdom, in the margins of the G7 Summit in Ise-Shima welcome the view shared by the leaders of Japan and the European Union on the occasion of their meeting on 3 May 2016 to instruct their respective negotiators to accelerate the negotiations on the Japan-EU Economic Partnership Agreement (EPA)/Free Trade Agreement (FTA) and reaffirm our strong commitment to reach agreement in principle as early as possible in 2016.

We commend the work of our negotiators over the last 3 years, and for the substantial progress already made. With our full backing, the negotiators are entrusted to make the efforts necessary in the coming months to move forward with the negotiations, paving the way for reaching agreement encompassing all key issues including all types of tariffs and non-tariff measures, in line with the timeline committed above in a constructive manner, based on mutual trust, toward a comprehensive, high-level and balanced agreement which further consolidates our solid trade and economic partnership.

Recognizing the strategic importance of the Japan-EU EPA/FTA, we remain committed to creating a free, fair and open international trade and economic system, which will promote stronger, sustainable and balanced growth and contribute to the creation of more jobs and economic opportunity in Japan and the European Union and to the increase of our international competitiveness.”

Emanating from Russia in the east and the so-called Islamic State of Iraq and the Levant (ISIL) in the south, the EU has been increasingly hit by destabilising messages amounting – in different forms and to different degrees – to coherent hostile ‘strategic communications’ campaigns, or the processes of infusing communications activities with an agenda or plan to impact the behaviour of a target audience. Both Russia and ISIL have engaged in aggressive messaging and deceptive media campaigns, albeit with distinct narratives, targets and audiences. This paper analyses the ‘what’ and the ‘how’: the respective narratives of each actor, their specificities, their similarities and their differences. The analysis also draws attention to strategic communications efforts undertaken by the EU, which are vectored into defensive (react and respond) and offensive (probe and push) dimensions. This understanding of the present context finally allows for an evaluation of what actions can be taken to enhance the effectiveness of the EU’s own strategic communications.
Source : © European Union, 2016 - EP

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On 26-27 May, President Tusk attends the G7 summit in Ise-Shima (Japan). Global growth remains an urgent priority for the G7 and leaders are expected to commit to further strengthening their policy response. They are also expected to discuss the most pressing foreign policy challenges, including the situation in Syria and Ukraine and cross-cutting themes like counter-terrorism. The G7 is also expected to discuss the global migration and refugee crisis and commit to increased assistance.

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EU Finance ministers meet in Brussels on 25 May 2016 to agree on a draft directive addressing tax avoidance practices used by large companies. It is discussing plans for a definitive VAT system and a report on VAT fraud, as well as banking union and macroeconomic imbalances and structural reforms in the member states.

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DRAFT OPINION on the future of ACP-EU relations beyond 2020
Committee on Foreign Affairs
Javier Couso Permuy

Source : © European Union, 2016 - EP

Representatives of the EU Member States, the Western Balkans and Turkey, the European Commission and the European Central Bank, as well as representatives of the central banks of the Western Balkans and Turkey[1] met for their annual economic policy dialogue[2]. Participants welcomed the submission of the 2016 Economic Reform Programmes (ERPs) of the Western Balkans and regretted that Turkey's ERP had been submitted with a significant delay. The programmes outline the medium-term macroeconomic and fiscal framework as well as structural reforms (affecting labour markets, transport, energy, education etc.) to enhance competitiveness and long-term growth. The programmes cover the period 2016-2018. 

Participants took note of the Conclusions of the General Affairs Council on 15 December 2015 in which the Council took note of the Commission's communication on the EU enlargement strategy and the reports, which have a strengthened focus on economic governance. The dialogue on economic governance with the Western Balkans and Turkey is meant to prepare them for their future participation in the EU economic policy coordination. The dialogue reflects to some extent the European Semester process at EU level. 

Participants recalled the commitment to set out a new set of targeted policy guidance to support efforts towards fulfilling the Copenhagen economic criteria. In this context, Participants agreed that the elements of the 2015 policy guidance which had not yet been fully implemented remained valid and needed be addressed by policymakers in the Western Balkans and Turkey. 

 [1] Montenegro, Serbia, the former Yugoslav Republic of Macedonia, Albania and Turkey are candidate countries for EU accession. 

[2] The conclusions of this dialogue are without prejudice to EU Member States' positions on the status of Kosovo.  

 

Plenary sessions : As milk prices have collapsed across the EU and show no signs of recovering any time soon, MEPs will quiz Commissioner Phil Hogan on measures to alleviate pressure on dairy farmers and stabilize their incomes in a debate on Thursday, starting at 8.30. Factors blamed for the crisis include the Russian ban on imports from the EU, the end of milk quotas in 2015 and a drop in global demand.

Source : © European Union, 2016 - EP

Plenary sessions : As milk prices have collapsed across the EU and show no signs of recovering any time soon, MEPs will quiz Commissioner Phil Hogan on measures to alleviate pressure on dairy farmers and stabilize their incomes in a debate on Thursday, starting at 8.30. Factors blamed for the crisis include the Russian ban on imports from the EU, the end of milk quotas in 2015 and a drop in global demand.

Source : © European Union, 2016 - EP

Plenary sessions : New initiatives to allow consumers and companies to buy and sell products and services online more easily across the EU were welcomed by most MEPs in a debate with Commission Vice-President for the Digital Single Market, Andrus Ansip, on Wednesday. Parliament will co-decide on equal footing with the EU Council of Ministers on the Digital Single Market legislative proposals.

Source : © European Union, 2016 - EP

Plenary sessions : King Willem-Alexander of the Netherlands addressed Parliament in Brussels in a formal sitting on Wednesday for the first time since his accession to the throne in April 2013. Speaking of identity and solidarity, the King said he belonged to the first generation of Europeans in history to enjoy the good fortune of peace and expressed the hope future generations would have this opportunity too: “It’s all too easy to take peace for granted.“

Source : © European Union, 2016 - EP

Plenary sessions : New initiatives to allow consumers and companies to buy and sell products and services online more easily across the EU were welcomed by most MEPs in a debate with Commission Vice-President for the Digital Single Market, Andrus Ansip, on Wednesday. Parliament will co-decide on equal footing with the EU Council of Ministers on the Digital Single Market legislative proposals.

Source : © European Union, 2016 - EP

Plenary sessions : King Willem-Alexander of the Netherlands addressed Parliament in Brussels in a formal sitting on Wednesday for the first time since his accession to the throne in April 2013. Speaking of identity and solidarity, the King said he belonged to the first generation of Europeans in history to enjoy the good fortune of peace and expressed the hope future generations would have this opportunity too: “It’s all too easy to take peace for granted.“

Source : © European Union, 2016 - EP

The Council of the European Union (ECOFIN): 

-       WELCOMES the Commission Communication "Towards a single EU VAT area - Time to decide" (VAT Action Plan) and TAKES NOTE of the Special Report of the Court of Auditors No. 24: "Tackling intra-Community VAT Fraud: More action needed", as well as of the findings and recommendations set out therein; 

-       RECALLS Council conclusions of 15 May 2012 "On the Future of VAT", where the Council has emphasised that the EU needs a simpler VAT system, which at the same time is more efficient, more robust, fraud-proof and tailored for single market and has pointed out the following principles and legal considerations, which should be taken into account in furtherance of any future action: cost-efficiency, proportionality, unanimity, data protection legislation, compliance with the subsidiarity principle and full respect for the respective competences of the Union and the Member States; 

-       AGREES that the EU VAT system needs to be modernised and improved with these general objectives in mind, while stressing the importance of keeping the EU's business environment competitive; 

-       ACKNOWLEDGES the objectives outlined in the VAT Action Plan, which provide a framework to achieve a Single EU VAT area, and 

-       ADOPTS the following conclusions: 

I.       ON URGENT MEASURES TO FIGHT VAT FRAUD AND TACKLE THE VAT GAP

The Council of the European Union: 

1.      RECALLS the utmost importance of robust legal rules which hamper VAT fraud and AGREES with the Commission and the Court of Auditors that improving administrative cooperation between tax authorities is of significant importance in the fight against VAT fraud, and hence UNDERTAKES to pursue discussion on means of enhancing the scope of administrative cooperation and stepping up efforts to exchange information between tax administrations; 

2.      CONFIRMS that there is a need for further co-operation in a spirit of good understanding among business and tax administrations, as well as between tax administrations of EU Member States; 

3.      UNDERLINES that further initiatives in this area should form an efficient addition to existing rules and instruments and also seek to guarantee high standards of data protection, and fully take into account the principles of sovereignty, subsidiarity and proportionality; 

4.      TAKES NOTE of the Commission's intention to table in 2017 a legislative proposal that will aim at improving the exchange, sharing and analysis of key information and foresee conducting of joint audits; 

5.      ACKNOWLEDGES that improvement of information exchange could result in a clear improvement of efficiency in the fight against VAT fraud, and CALLS upon the Commission to propose ways of addressing  legal obstacles and practical limitations that might exist in the EU and in the Member States that prevent from making a qualitative leap in this area in the EU; 

6.      HIGHLIGHTS that this work should promote co-operation and cover the full range of available means and methods and alignment of procedures, including, inter alia, VIES, Eurofisc, feedback procedures and customs procedure 42, where the challenges both to customs and tax authorities must also be addressed; 

7.      LOOKS FORWARD to the other measures referred to in the VAT Action Plan that the Commission will propose to the Council with the objective of improving cooperation between tax administration and customs authorities; 

8.      UNDERLINES that as discussed during an informal meeting of ECOFIN ministers in Amsterdam, automatic exchange of information is one of the ways forward in the fight against fraud; 

9.      CONFIRMS that risk assessment and analysis remains a major area for further improvement in the EU, and INVITES the Commission, after the results of the feasibility study on Transaction Network Analysis have been evaluated by Member States, to present relevant initiatives enabling the Member States, wishing to start this tool on a voluntary basis, to exercise such an option, and at the same time ASKS the Commission to consider the possibilities of an explicit legal basis; 

10.    RECOGNISES that some Member States are more heavily affected by VAT fraud than others and the need to find practical and short-term solutions rapidly, and TAKES NOTE of the position of the Commission regarding a possible temporary derogation for certain Member States to apply the reverse charge mechanism in a wider scope and that the implementation of such derogation would require legislative measures;

11.    CONFIRMS that such derogations should not disproportionally hamper the proper functioning of the internal market; 

12.    UNDERLINES, without prejudice to a definitive VAT system, that the information obtained from a temporary derogation could be useful to decide on the most efficient way of fighting VAT fraud, and LOOKS FORWARD to an in-depth analysis by the Commission on possibilities for a temporary derogation, to be presented at the upcoming June ECOFIN; 

13.    TAKES NOTE of the non-legislative measures whereby the Commission intends to tackle the VAT gap and STRESSES that the Council will examine these non-legislative measures on the basis of the principles of sovereignty, subsidiarity, and proportionality. 

II.      ON SHORT AND MEDIUM-TERM ACTIONS IN VAT AREA AND SMEs 

The Council of the European Union: 

14.    WELCOMES the call by the Commission to reduce VAT compliance burdens for business, particularly for SMEs, both within Member States and across borders, and TAKES NOTE of the Commission's intention to make legislative proposals in  2016 and 2017; 

15.    EMPHASISES that the ultimate objective remains that VAT compliance costs in the single market are brought closer to the levels of those in domestic trade, however, further simplification should not result in an increase of VAT fraud risks or disproportionate rise of the costs of tax administration; 

16.    HIGHLIGHTS the importance of reflecting upon the position of micro-SMEs in the VAT system, in order to promote growth, jobs and real economy in the EU, without causing distortions of competition; 

17.    In the context of the Digital Single Market Strategy, STRESSES the importance of finding an EU-level solution rapidly to eliminate the competitive disadvantage for EU suppliers and UNDERTAKES to review the scope and discuss the possibility of repealing the VAT exemption for final importation of small consignments of goods into the EU by non-EU suppliers, considering also the impact of possible changes on the customs administration; 

18.    RECOGNISES the need to simplify cross-border e-commerce, and the opportunity to extend the "One Stop Shop" for online sales of tangible goods to final consumers and CALLS FOR further analysis and technical work to be undertaken on a common EU-wide simplification measure, including a threshold; 

19.    NOTES that the debate will continue concerning a possible  introduction of legal means allowing for home country checks, including a single audit of cross-border businesses;

20.    In this context, LOOKS FORWARD to receiving the results of the ongoing Commission' study on VAT obstacles to cross-border e-commerce and the legislative proposals by the Commission; 

21.    STRESSES that improvements on the current system could be possible and necessary in the short term. 

III.    ON THE DEFINITIVE VAT SYSTEM (SINGLE EU VAT AREA) 

The Council of the European Union: 

22.    TAKES NOTE of the points made by the Commission in its VAT Action Plan as regards the way forward towards the definitive VAT system and of its intention to present a legislative proposal in 2017 for the definitive VAT system for cross-border trade, as a first step;

23.    NOTES, while working towards the definitive VAT system in the EU, the importance of fully respecting the principles of subsidiarity and proportionality and taking full account of how potential EU-level solutions would best fit with the aspects upon which Member States continue to exercise their competence; 

24.    REITERATES that the principle of “taxation in the Member State of origin of the supply of goods or services”, as envisaged in article 402 of Directive 2006/112/EC on the common system of value added tax, should be replaced by the principle of “taxation in the Member State of destination” for the definitive VAT system for B2B transactions, as stated in the Council conclusions of 15 May 2012; 

25.    WELCOMES the in-depth technical work conducted by the Commission so far, as well as the broadly based dialogue it initiated with Member States to examine in detail the different possible ways how to best implement the destination principle; 

26.    STRESSES nevertheless that the work has to continue to set ground for the political choice to be made with regard to the definitive VAT system; 

27.    TAKES NOTE that taxation with cross-border reverse charge in the Member State of destination could be analysed as an option to the proposed taxation of cross-border supplies for the definitive VAT system; 

28.    UNDERSCORES that the Council will continue to follow up the debate to reach an agreement on the political guidance to the Commission to conduct further analysis that would enable it to carry this work forward and enable the Council to properly evaluate the impact of possible technical solutions and adopt those that suit the common EU objectives best. 

IV.    ON VAT RATES 

The Council of the European Union: 

29.    TAKES NOTE of the directions of action proposed in the Commission Action Plan on VAT with regard to the VAT rate system and its intention to make a legislative proposal in 2017, proposing a reform to give more freedom to Member States in setting up rates and proposing two options; 

30.    RECALLS the conclusions of the European Council of 17-18 March 2016 which welcomed "the intention of the Commission to include proposals for increased flexibility for Member States with respect to reduced rates of VAT, which would provide the option to Member States of VAT zero rating‎ for sanitary products";

31.    WELCOMES the intention of the Commission to present a proposal for increased flexibility for Member States, so that they could benefit from the existing reduced and zero rates in other Member States, INVITES the Commission to include an impact assessment, and STRESSES that a sufficient level of harmonisation in the EU remains required and the adopted solution has to be carefully balanced to avoid distortion of competition, rise in business costs and negative impact on the functioning of the single market; 

32.    INVITES the Commission to present a legislative proposal which integrates provisions concerning VAT rates for e-publications in the context of Digital Single Market initiatives by the end of 2016 and include an impact assessment; 

33.    CALLS UPON the Commission, in line with the March 2016 European Council conclusions, to present to the Council a legislative proposal foreseeing an option to Member States of VAT reduced or zero rating for women's sanitary products at the earliest opportunity.