ECOFIN

George Osborne Excerpts

Wednesday 14th May 2014 Written Statements

[The Chancellor of the Exchequer (Mr George Osborne)]

A meeting of the Economic and Financial Affairs Council was held in Brussels on 6 May 2014. Ministers discussed the following items:

Current legislative proposals

The presidency provided an update on the ongoing work on financial services.

Parent subsidiary directive

Council discussed a proposal for a directive to amend the parent subsidiary directive. The proposal looks to close a loophole whereby companies operating across Europe could exploit differences between member states in the tax classification of certain financial instruments in order to reduce their overall tax liability. The presidency concluded that further work will need to take place at technical level to clarify the text as necessary and that it will need to return to a future Council, probably in June. The Government support an agreement as soon as possible.

Financial transaction tax

Council held a state of play discussion on the proposal for a Council directive implementing enhanced co-operation in the area of financial transaction tax (FTT). A total of 10 of the member states participating in the enhanced co-operation circulated a statement during the Council expressing their political commitment to a FTT. The main points of note are that the participants wish to implement the tax in stages, with the first stage applying to shares and some derivatives; and that they wish to implement this first stage by 1 January 2016.

At Council, which was in public session—and can be seen here http://video.consilium.europa.eu/webcast.aspx? ticket=775-979-14373—the UK stated concerns about the economic impact of the tax and that the enhanced co-operation procedure has to operate with transparency as article 330 of the treaty on the functioning of the European Union sets out, with all member states participating in the deliberations. The UK was supported on these points by a number of other member states. Additionally, the UK expressed that the Court of Justice of the European Union’s recent ruling allowed for the UK and any member state to challenge an adopted FTT in court if it is harmful to them or the single market.

Macro-economic imbalances procedure: in-depth reviews

Council adopted Council conclusions on the results of the UK and 16 other member states’ macro-economic imbalances procedure: in-depth reviews. The UK does not have an excessive imbalance and does not need to take further action under the macro-economic imbalances procedure.

Follow-up to the meetings of G20 Finance Ministers and governors (10-11 April) and IMF/World Bank (11-13 April) in Washington DC

The presidency and Commission debriefed Ministers on the main outcomes of the G20 Finance Ministers and central bank governors and IMF/World Bank meetings held in Washington DC from 10-13 April. The Government remain supportive of the Australian G20 agenda, particularly on the development of comprehensive growth strategies.