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EU finance ministers discuss Annual Growth Survey priorities, adopt measures to prevent corporate tax avoidance
At the ECOFIN meeting on 8 December, EU finance ministers discussed the priorities of the Annual Growth Survey (AGS) on how to strengthen the recovery and foster convergence, with which the Commission kicked off the European Semester. They also discussed the Alert Mechanism Report in which the Commission on 26 November cautioned against high indebtedness and lack of investment. Ministers plan to adopt conclusions on both reports at their meeting on 15 January 2016. They also agreed to discuss the Commission's recommendation on the economic policy of the euro area with a view to adopt them in March 2016, following endorsement by the European Council in February. In the area of taxation, the finance ministers agreed on several actions on the basis of Commission proposals to prevent corporate tax avoidance. They adopted a directive aimed at improving the transparency of tax rulings, as well as conclusions underlining their support for EU and OECD efforts to prevent base erosion and profit shifting. The latter included renewing the mandate for the Code of Conduct Group to examine specific tax practices. The finance ministers also examined options to choke off financing for terrorism.The Commission presented its Communication "Towards completion of the Banking Union" and the proposed Regulation to establish a European Deposit Insurance Scheme
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The Annual Growth Survey
is about strengthening the economic
recovery and supporting the process of
convergence, both within and among EU
Member States, and moving closer to the
best performers.
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Vice-President Valdis
Dombrovskis, responsible for the Euro and
Social Dialogue
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Macro-Financial
Assistance: Commission disburses EUR
100 million EU loan to
Tunisia
The European Commission disbursed a
loan on 1 December of EUR 100 million
to Tunisia on behalf of the EU. The
loan is the second tranche of the EUR
300 million Macro-Financial Assistance
(MFA) programme to Tunisia. The first
tranche, also of EUR 100 million,
was disbursed on
7 May 2015. The
MFA programme is part of wider
efforts by the EU and other
international donors to help Tunisia
overcome its economic challenges.
Tunisia faces a weak external economic
environment, regional instability and
threats to its domestic security. The
MFA supports the economic adjustment
and reform programme agreed between
Tunisia and the International Monetary
Fund (in the context of the Stand-by
Arrangement) in June 2013. MFA payments
are conditional on the implementation
of a number of economic policy measures
set out in a Memorandum of
Understanding. This assistance comes in
addition to
other forms of support for Tunisia
from the EU, including more than EUR
800 million in grants since the 2011
revolution, as well as substantial
loans from the European Investment
Bank.
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Single
Resolution Mechanism: ratification of
intergovernmental agreement makes
resolution of banks fully
operational
The Intergovernmental Agreement (IGA)
for the Single Resolution Mechanism
(SRM) was ratified on 30 November by a
sufficient number of
participating Member States, thus
completing a key piece of the EU's
Banking Union. Ratification of the
agreement ensures that the Single
Resolution Board (SRB) will become
fully operational, and that the Single
Resolution Fund (SRF) will start to be
funded from national resolution funds
in the euro area. The SRF will be built
up over eight years and fully financed
by bank contributions. The
SRB became operational in January
2015 as an independent EU Agency and
will have full resolution powers as of
1 January 2016. It will be responsible
for around 120 banking groups in the
euro area as well as cross-border
banking groups. The IGA was part of the
compromise reached by the Member States
and the European Parliament on the SRM
in March 2014, and sits alongside the
SRM Regulation. As a treaty, it
needed ratification by national
parliaments.
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ECB
decreases rate on deposit facility to
-0.30%, extends asset purchase
programme
At its meeting on 3 December, the
Governing Council of the European
Central Bank (ECB) decided to decrease
the interest rate on the deposit
facility by 10 basis points to -0.30%,
with effect from 9 December 2015. The
interest rates on the main refinancing
operations and the marginal lending
facility will remain unchanged at 0.05%
and 0.30% respectively. The ECB also
decided to extend the asset purchase
programme (APP). The monthly purchases
of EUR 60 billion under the APP will
run until the end of March 2017, or
beyond, if necessary. They will
continue until the Governing Council
sees a sustained adjustment in the path
of inflation towards the medium term
target of just below 2%. In addition,
the ECB will reinvest the principal
payments on the securities purchased
under the APP as the securities mature.
Moreover, euro-denominated marketable
debt instruments issued by regional and
local governments located in the euro
area will now be included in the list
of assets that are eligible for regular
purchases by the respective national
central banks.
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One in four
Europeans at risk; Real Economy episode
looks at challenges in tackling
poverty
The latest episode of Real Economy
looks at the challenges we face in
tackling poverty. One in four Europeans
is at risk of falling into poverty.
This episode examines what's called
'relative poverty' - being unable to
maintain a minimum standard of living -
rather than 'absolute poverty' - the
daily struggle to survive, Women and
children are the groups most vulnerable
to poverty, with 26 million children
living in poverty. Jana Hainsworth, the
Secretary General of Eurochild, points
out that women are not only
disadvantaged because of discrimination
on the labour market, but also because
they are most likely to take career
breaks and take on more of the
household chores and the caring, which
limits their availability. The
EU's goal is to bring 20 million
people out of relative poverty by 2020.
Real Economy aims to bring the
complexities of economic matters in the
EU closer to Euronews' daily audience
of 6.5 million viewers. Besides
watching it on TV, viewers can also
follow it online -
live or on demand.
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Commission
outlines vision for modernising EU
copyright rules and enabling
cross-border portability of
content
As part of its Digital Single Market
strategy, the Commission has presented
a
proposal to allow Europeans to
travel with their online content and
an action
plan to modernise EU copyright
rules. At present, citizens travelling
within the EU may be cut off from
online services providing content that
they have paid for in their home
country. The proposed Regulation
addresses these restrictions in order
to allow EU residents to travel with
the digital content they have purchased
or subscribed to at home. While making
sure that Europeans can access a wide
legal offer of content across borders,
the Commission also wants to ensure
that authors and other rights holders
are better protected and fairly
remunerated. For this reason the
Commission is proposing to modernise
the EU's copyright rules. The new
copyright framework would be based on
widening access to content across the
EU; allowing exceptions to copyright
rules in defined circumstances;
creating a fairer marketplace by
ensuring that the benefits of the
online use of works is fairly shared;
and by stepping up the fight against
piracy.
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November
euro area annual inflation stable at
0.1%
Euro area annual inflation is expected
to be 0.1% in November 2015, stable
compared with October 2015, according
to a flash estimate from Eurostat, the
statistical office of the EU. Looking
at the main components of euro area
inflation, the category food, alcohol
& tobacco is expected to have the
highest annual rate in November (1.5%,
compared with 1.6% in October),
followed by services (1.1%, compared
with 1.3% in October), non-energy
industrial goods (0.5%, compared with
0.6% in October) and energy (-7.3%,
compared with -8.5% in
October).
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Tax
revenue elasticities corrected for
policy changes in the EU.
Discussion Papers
18.
This paper
investigates how tax revenue
elasticities develop with respect
to their tax base and analyses the
specific impact of the business
cycle. The main novelty of the
paper is the use revenue data net
of discretionary tax measures. The
data comes from a new database,
filled by Member States and managed
by DG ECFIN. Based on an EU country
panel for the period 2001-13, the
authors estimated short- and
long-term revenue elasticities for
consumption taxes, social security
contributions, personal income
taxes and corporate income taxes.
The analysis confirms the impact of
the business cycle on short-term
revenue elasticities - beyond the
direct effect on the tax base - for
all revenue categories, except for
consumption taxes. Corporate income
taxes appear to be the most
cyclically dependent tax category,
followed by personal income
taxes.
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The role of equity in
financing in the economy
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Directorate-General for Economic
and Financial Affairs
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