21 March 2014

European Council Conclusions: European Semester / Savings taxation

Europe is emerging from the financial and economic crisis. The European economy is recovering, after several years of limited or even negative growth. The recovery is expected to strengthen this year. The European Council had an exchange of views on the economic and social situation and outlook. It discussed in particular the most appropriate policy response for the short and medium term. It concluded the first phase of the European Semester and had a first discussion on the implementation of the Europe 2020 Strategy ahead of the mid-term review at the Spring 2015 European Council. It also focused on a stronger European industrial competitiveness as a driver for economic growth and jobs. It held a first policy debate on the framework for climate and energy in the period from 2020 to 2030 and agreed on the way forward. It underlined the important link between the Europe 2020 strategy, industrial competitiveness and climate and energy policies.

The European Council hailed the agreement reached on the SRM regulation which will open the way to the completion of the Banking Union. This represents another crucial step towards a stronger and more resilient Economic and Monetary Union. Finally, it cleared the way for the adoption of the Directive on taxation of savings income.

THE EUROPEAN SEMESTER

1. The European Council in December 2013 endorsed the five broad policy priorities for the European Union and its Member States set out in the 2014 Annual Growth Survey (AGS): pursuing differentiated, growth-friendly fiscal consolidation, restoring normal lending to the economy, promoting growth and competitiveness, tackling unemployment and the social consequences of the crisis, while modernising public administration. To steer the Council's discussions on the 2014 European Semester, the European Council put particular emphasis on policies enhancing competitiveness, supporting job creation and fighting unemployment, particularly youth unemployment, and on the follow-up to reforms to improve the functioning of labour markets. The National Reform Programmes and the Stability and Convergence Programmes should address the issues identified in last year's Country-Specific Recommendations and in the Commission's recent analysis in the context of the integrated surveillance of macroeconomic and fiscal imbalances, including its in-depth reviews and the Stability and Growth Pact, while taking full account of the discussions held in the Council in the framework of the European Semester.

2. The European Council assessed the implementation of the Europe 2020 Strategy on the basis of the Commission communication. Achieving the Strategy's goal of smart, sustainable and inclusive growth remains crucial. The crisis has slowed down progress towards the key goals of the Strategy and the long-term challenges affecting growth in Europe have not gone away. The European Council calls for stepping up efforts to reach the Europe 2020 targets and looks forward to the planned review of the EU 2020 Strategy in 2015.

3. The European Council congratulates the negotiators of the European Parliament and the Council on the agreement reached on the Single Resolution Mechanism Regulation. As was underlined at today's exchange of views between the President of the European Parliament and the European Council, this is a major achievement that will open the way to the completion of the Banking Union. It is important now to formally adopt the Regulation before the end of the current legislature. Together with the Intergovernmental Agreement on the Transfer and Mutualisation of Contributions to the Single Resolution Fund, this represents another crucial step towards a stronger and more resilient Economic and Monetary Union.

Savings Taxation

4. The European Council welcomes the Commission’s report on the state of play of negotiations on savings taxation with European third countries (Switzerland, Liechtenstein, Monaco, Andorra and San Marino) and calls on those countries to commit fully to implementing the new single global standard for automatic exchange of information, developed by the OECD and endorsed by the G20, and to the early adopters initiative.

The European Council calls on the Commission to carry forth the negotiations with those countries swiftly with a view to concluding them by the end of the year, and invites the Commission to report on the state of play at its December meeting. If sufficient progress is not made, the Commission's report should explore possible options to ensure compliance with the new global standard. In the light of this, the Council will adopt the Directive on taxation of savings income at its next March 2014 meeting. The European Council invites the Council to ensure that, with the adoption of the Directive on Administrative Cooperation by the end of 2014, EU law is fully aligned with the new global standard.

Full conclusion

Council adopts new rules on the taxation of savings income

THE EUROPEAN COUNCIL IN 2013: Report by the President of the European Council, Herman Van Rompuy, 19.3.14

See also: Closing remarks of President Barroso following the second day of the European Council

Council president Van Rompuy welcomed the agreement reached at the European Council on strengthening EU rules on taxation of savings income: "This is indispensable for enabling the Member States to better clamp down on tax fraud and tax evasion", he said. "Today's agreement follows up on the May 2013 European Council's strategy to fight tax fraud and tax evasion. Effective tax systems are fundamental elements of well-functioning social market economies, and for providing social justice. This is a clear message that Europe is fully committed to the new single global standard for automatic exchange of tax information."

Press release

In his speech following the first session of the European Council, Van Rompuy said: "Tonight we made a breakthrough in the fight against tax fraud and tax evasion. In technical terms, we agreed to adopt the revised directive on taxation of savings income after six years of negotiations. In political terms, we held our promise of last May and show strong, unanimous commitment to the global fight against tax evasion. All Member States are firmly on board. More than ever we will play a strong hand internationally – to close down loopholes, to promote automatic information exchange, to bring in more transparency. Banking secrecy is set to die."

Full speech

In his speech following the first session of the European Council, President Barroso said: "It took six long years of negotiations, but we did it. We are bringing an end to banking secrecy in Europe. And we will be in a strong position to negotiate with key international financial centres. I hope we can achieve real progress in this matter by the end of this year."

Full speech

© European Council