eu Archives - Pat Carroll PCCO - Chartered Accountants & Tax Advisors

EU Commission proposes €750 billion coronavirus recovery fund

The European Commission has proposed a recovery fund of €750 billion, which it says is designed to repair the economic damage caused by the coronavirus pandemic.

According to European Commission President Ursula von der Leyen, the money would be disbursed via grants and loans, with the commission using the EU budget as leverage to raise funds on the financial markets.

After the pandemic hit Europe, there were weeks of division and rancour over the EU’s response, with the worst hit countries accusing richer northern member states of lacking a spirit of solidarity.

The EU has already approved €540 billion in soft loans and supports in its immediate response, but today’s proposal is for the big recovery effort that Europe will need once the pandemic passes.

The plan is that the commission would raise new forms of revenue for its seven-year budget, and then use that money to raise the €750 billion on the markets.

That money would go to the member states, regions and economic sectors worst hit.

The digital economy and the new European Green Deal, designed to make the continent carbon neutral by 2050, would be prioritised.

The idea is that lessons will be learned and extra resources channeled to research and development, and to stockpiling vital medical and personal protective equipment.

But the plans will face formidable opposition from member states such as Austria, the Netherlands, Sweden and Denmark.

They are the so-called “frugal four”, who only want the recovery fund to come by way of loans, which will have to be paid back by member states.

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EU Commission recommends Ireland broaden its tax bases

The European Commission is recommending that Ireland takes all necessary measures to effectively address the Covid-19 pandemic, sustain the economy and support the recovery that follows.

It also says the tax base here should be broadened over this year and next.

“The challenges facing Ireland in regard to poverty and employment quality and support, including for people with disabilities, remain and they are likely to be exacerbated by the pandemic,” the Commission says.

The recommendations are contained in the Commission’s response to the Government’s submission of its National Reform Programme and Stability Programme Update last month.

It says that when economic conditions allow, fiscal policies aimed at achieving prudent medium-term fiscal positions and ensuring debt sustainability should be pursued, while at the same time enhancing investment.

The Commission says Ireland should front-load mature public investment projects and promote private investment to foster the economic recovery.

It claims investment needs to be focused on the green and digital transition, in particular on clean and efficient production and use of energy, sustainable public transport, water supply and treatment, research and innovation and digital infrastructure.

“The restart of the economy requires that Ireland advances on its ambitious environmental, climate, energy and infrastructure investments,” it says.

“Ireland has lagged behind so far in tackling decarbonisation. Greenhouse gas emissions in transport and buildings are high and have remained on a rising trend. Ireland will fall short of the 2020 energy efficiency and renewable energy targets.”

Support to companies, particularly small and medium-sized ones, is encouraged, especially through measures that boost their liquidity, while assistance is also needed for households impacted by the Covid-19 crisis.

“The Irish authorities and banks have introduced a number of measures to alleviate the financial difficulties faced by businesses and households,” it states.

“It is important that these measures provide the necessary liquidity and foster sustainable restructuring solutions for borrowers whose financial difficulties are strictly linked to the outbreak, and who are therefore expected to return to viability following a transition period.”

It also says that action needs to be stepped up to address features of the tax system that facilitate aggressive tax planning.

“Ireland has taken steps to address aggressive tax planning practices by implementing international and European agreed initiatives and taking some additional measures at national level,” it said.

“However, the high level of royalty and dividend payments as a percentage of GDP suggests that Ireland’s tax rules are used by companies that engage in aggressive tax planning, and the effectiveness of the national measures will have to be assessed.”

Improved accessibility and a strengthening of the health system’s resilience is also called for, including responding to the health workforce’s needs and ensuring universal coverage to primary care.

“Timely emergency measures have been put in place to increase hospital capacity and provide temporary universal healthcare services,” it says.

“However in the medium term, Ireland still needs to address the structural limited efficiency, flexibility, resilience and accessibility of its healthcare system.”

The Commission’s report also says employment needs to be supported through the development of skills, while the risk of digital divide, including in the education sector, need to be addressed.

“With the contract having been signed for a major public investment under the National Broadband Plan to address infrastructure gaps, it is therefore important to closely monitor and ensure the timely implementation of the rollout of the publicly supported ultra fast broadband network, especially in rural areas,” it says.

The provision of social and affordable housing is also recommended.

“Further efforts are needed to cover the needs of remaining households on the current waiting list and of potential new applicants,” the Commission says.

“Of the around 10,000 homeless people registered in Ireland, 3,500 are children. This raises concerns about the potential risks of deepening inequalities, entrenched poverty and social exclusion.”

The update also says close coordination between economies in the economic and monetary union is key to achieve a swift recovery from the economic impact of Covid-19.

“Ireland should, as a Member State whose currency is the euro – and taking into account political guidance by the Eurogroup – ensure its policies remain consistent with the euro area recommendations and coordinated with those of the other euro area Member States,” it states.

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EU Commission recommends Ireland broaden its tax bases

The European Commission is recommending that Ireland takes all necessary measures to effectively address the Covid-19 pandemic, sustain the economy and support the recovery that follows.

It also says the tax base here should be broadened over this year and next.

“The challenges facing Ireland in regard to poverty and employment quality and support, including for people with disabilities, remain and they are likely to be exacerbated by the pandemic,” the Commission says.

The recommendations are contained in the Commission’s response to the Government’s submission of its National Reform Programme and Stability Programme Update last month.

It says that when economic conditions allow, fiscal policies aimed at achieving prudent medium-term fiscal positions and ensuring debt sustainability should be pursued, while at the same time enhancing investment.

The Commission says Ireland should front-load mature public investment projects and promote private investment to foster the economic recovery.

It claims investment needs to be focused on the green and digital transition, in particular on clean and efficient production and use of energy, sustainable public transport, water supply and treatment, research and innovation and digital infrastructure.

“The restart of the economy requires that Ireland advances on its ambitious environmental, climate, energy and infrastructure investments,” it says.

“Ireland has lagged behind so far in tackling decarbonisation. Greenhouse gas emissions in transport and buildings are high and have remained on a rising trend. Ireland will fall short of the 2020 energy efficiency and renewable energy targets.”

Support to companies, particularly small and medium-sized ones, is encouraged, especially through measures that boost their liquidity, while assistance is also needed for households impacted by the Covid-19 crisis.

“The Irish authorities and banks have introduced a number of measures to alleviate the financial difficulties faced by businesses and households,” it states.

“It is important that these measures provide the necessary liquidity and foster sustainable restructuring solutions for borrowers whose financial difficulties are strictly linked to the outbreak, and who are therefore expected to return to viability following a transition period.”

It also says that action needs to be stepped up to address features of the tax system that facilitate aggressive tax planning.

“Ireland has taken steps to address aggressive tax planning practices by implementing international and European agreed initiatives and taking some additional measures at national level,” it said.

“However, the high level of royalty and dividend payments as a percentage of GDP suggests that Ireland’s tax rules are used by companies that engage in aggressive tax planning, and the effectiveness of the national measures will have to be assessed.”

Improved accessibility and a strengthening of the health system’s resilience is also called for, including responding to the health workforce’s needs and ensuring universal coverage to primary care.

“Timely emergency measures have been put in place to increase hospital capacity and provide temporary universal healthcare services,” it says.

“However in the medium term, Ireland still needs to address the structural limited efficiency, flexibility, resilience and accessibility of its healthcare system.”

The Commission’s report also says employment needs to be supported through the development of skills, while the risk of digital divide, including in the education sector, need to be addressed.

“With the contract having been signed for a major public investment under the National Broadband Plan to address infrastructure gaps, it is therefore important to closely monitor and ensure the timely implementation of the rollout of the publicly supported ultra fast broadband network, especially in rural areas,” it says.

The provision of social and affordable housing is also recommended.

“Further efforts are needed to cover the needs of remaining households on the current waiting list and of potential new applicants,” the Commission says.

“Of the around 10,000 homeless people registered in Ireland, 3,500 are children. This raises concerns about the potential risks of deepening inequalities, entrenched poverty and social exclusion.”

The update also says close coordination between economies in the economic and monetary union is key to achieve a swift recovery from the economic impact of Covid-19.

“Ireland should, as a Member State whose currency is the euro – and taking into account political guidance by the Eurogroup – ensure its policies remain consistent with the euro area recommendations and coordinated with those of the other euro area Member States,” it states.

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Fears for flow of goods after EU border closures

The European Commission (EC) will encourage member states to co-ordinate border closures amid fears that unilateral closures by individual countries could inhibit the flow of goods and critically needed people.

More and more member states have announced restrictions on people entering their territory as the coronavirus continues to spread throughout Europe.

Spain said it was considering closing its borders while Germany has introduced border controls with Austria, Denmark, France, Luxembourg and Switzerland in a bid to stem the coronavirus outbreak.

Last night the Commission moved to restrict the export of protective equipment for healthcare workers to outside the European Union (EU) in order to ensure that member states had sufficient supplies.

The EU has struggled to maintain a coordinated response to the crisis, as countries take unilateral measures to impose restrictions on their borders.

Over the weekend Denmark announced border measures, joining Poland and the Czech Republic who took action to restrict their frontiers last week. The restrictions are not blanket, and some countries have distinguished goods traffic from movements of people.

However, they have caused huge queues in some instances, and prompted EC president Ursula von der Leyen yesterday to warn that shops could face difficulties in stocking supplies that are produced elsewhere in the single market.

The Commission will today issue guidelines as to what health checks member states could operate at their borders. The EC will also launch an initiative to jointly procure with member states testing kits and respiratory ventilators so that countries within the EU hardest hit will be able to get the equipment needed.

At the same time, the Commission last night adopted an emergency measure that would have the effect of restricting the sale outside the EU of personal protective equipment for healthcare workers.

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European Union plans new rules around AI, data sharing

Social media platforms and artificial intelligence developers will face new regulations under a European Union plan published today.

The European Commission says its digital strategy is designed to make technology more people-focused, while also ensuring its digital industry is not reliant on other countries in the future.

It includes changes to the way data is treated by companies and organisations, with the bloc ultimately aiming to create a single market for data. 

This will put greater obligations on firms to make the data they hold accessible to others, which the commission says will give people more control over how their information is used.

It said that a small number of large technology firms currently hold the majority of the world’s data, but there were huge opportunities for Europe if this was made available to others.

The strategy also proposes a framework for the use of artificial intelligence, which would include a labeling scheme for trusted technology.

The commission said regulation around artificial intelligence would be risk-based, with products in areas like health and policing facing stricter rules than those used in consumer goods.

Meanwhile it also hopes to clarify rules around the use of facial recognition.

The EU says that remote systems that check people against a database are intrusive and – in principle – prohibited at present.

It says such technology carries “specific risks for fundamental rights”, and any use must have a substantial public interest.

Any other potential exceptions for its use will be considered as part of a “broad debate” on the matter, it said.

Meanwhile the bloc will seek to improve cyber-security, creating “ground rules” for authorities.

Improving the digital economy is one of two key goals of commission president Ursula von der Leyen, alongside the European Green Deal.

Tying in with that, the plan calls for digital centres in Europe to be carbon neutral by 2030.

The commission says it wants to make technology citizen-centred, while also ensuring a fair and competitive market that gives access to smaller firms.

It also wants to build digital capabilities within the EU, ultimately making it “technologically sovereign”.

Speaking at a news conference following the launch of the strategy, EU industry chief Thierry Breton referred to some of the online platforms that will be impacted by the rule changes.

“We see some platforms as gatekeepers, that is not what we want. We will have some ex ante regulations,” Mr Breton said.

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EU says member states can ban or restrict high-risk suppliers from their 5G networks

EU countries including Ireland can restrict or ban high-risk 5G vendors from core parts of their telecoms networks, according to new EU guidelines published today.

The move is likely to hurt China’s Huawei but unlikely to appease the United States.

The non-binding recommendations, agreed by the bloc’s 28 countries, seek to tackle cyber-security risks at national and EU level, with concerns mainly focused on Huawei, although the guidelines do not identify any particular country or company.

Huawei welcomed the EU’s decision which it said would enable it to continue participating in Europe’s 5G roll-out.

The United States is worried that 5G dominance is a milestone towards Chinese technological supremacy that could define the geopolitics of the 21st century.

The US and the EU are also concerned about Chinese laws that require companies to assist in national intelligence work.

The EU sees 5G as key to boosting economic growth and competing with the United States and China.

Huawei, the world’s biggest producer of telecoms equipment, competes with Sweden’s Ericsson and Finland’s Nokia.

“Today we are equipping EU member states, telecoms operators and users with the tools to build and protect a European infrastructure with the highest security standards so we all fully benefit from the potential that 5G has to offer,” Europe’s industry chief, Thierry Breton, said in a statement.

The guidelines call on EU countries to assess the risk profile of suppliers on a national or EU level and allow them to exclude high risk suppliers for the core infrastructure.

EU governments are also advised to use several 5G providers rather than depend on one company.

The providers should be assessed on technical and non-technical factors including the risk of interference by state-backed companies.

The Commission said it was ready to bolster the bloc’s 5G cyber-security by using trade defence tools against dumping or foreign subsidies.

EU countries have to implement the guidelines by April and report on their progress by June.

The United States wants the bloc to ban Huawei on fears that its gear could be used by China for spying, allegations rejected by the company.

The EU, however, is hoping a collective approach based on a checklist of technical and non-technical risks and targeted measures will take some of the U.S. pressure off.

“This non-biased and fact-based approach towards 5G security allows Europe to have a more secure and faster 5G network,” Huawei Ireland said in a statement.

“We will continue to work with our stakeholders here including the Department of Communications and Comreg to help Ireland take a positive, evidence-based approach to the European Commission’s recommendation.”

The company added that it had been a trusted partner in Ireland for the past 15 years, is part of Ireland’s digital ecosystem and is fully committed to rolling out 5G across Ireland.

Yesterday, Britain opted to allow Huawei to supply equipment for non-sensitive parts of its 5G network rather than bow to US pressure and ban the company completely.

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Republic likely to be in firing line as EU to consider tougher tax haven listing

A group of European Union countries is calling for the bloc to cast a wider net when listing tax havens and to consider imposing stricter sanctions for countries facilitating tax avoidance, according to an EU document and an EU official. The move is likely to spark some fear in Government circles.

The document, prepared by the Danish government, urges a discussion on whether “current criteria provide sufficient protection against tax avoidance and evasion” and pushes for “strengthened” standards and sanctions. Germany and France were among its backers.

It also calls for a discussion on how member states deal with the issue, asking “Do we internally have sufficient safeguards against tax avoidance and evasion?”

This potentially sets up a dispute with the Republic and other EU members including Luxembourg and the Netherlands, which widely use low tax and other sweeteners to host EU headquarters of foreign firms, depriving other EU governments of tax revenues from profits that corporations make on their territory.

At a meeting of EU finance ministers on Thursday, several EU states backed the Danish proposal, one EU official said, naming Germany, France, Spain and Austria among the explicit supporters.

Croatia, which holds the EU chair from January, said the review of the current criteria would be discussed during its six-month presidency, the official said. The review was likely to take place in February or March, the official added.

After revelations of widespread tax avoidance schemes used by corporations and wealthy individuals to lower their tax bills, the EU set up a blacklist in 2017, but its definition of tax havens was narrow. For example a 0 per cent corporate tax rate is not a sufficient condition for being listed.

It also screens only non-EU countries, saying its 28 states were already applying high standards against tax avoidance.

Blacklisted

Foreign jurisdictions are blacklisted if they do not meet EU standards on tax transparency and regulation. Countries that commit to changes are included in a so-called grey list until they deliver, and if they miss deadlines, they end up on the blacklist.

The listing has pushed more than 60 countries to pledge changes, but only eight jurisdictions are currently blacklisted. They are mostly Pacific and Caribbean islands with little financial relation with the EU.

The Republic, Luxembourg and the Netherlands were listed in a report by International Monetary Fund researchers in September as world-leading tax havens, together with Hong Kong, the British Virgin Islands, Bermuda, Singapore, the Cayman Islands, Switzerland and Mauritius. None of them are on the EU list.

The EU Commission supported the Danish initiative, the EU official said. Tax commissioner Paolo Gentiloni has publicly pledged to work for sanctions against blacklisted jurisdictions, which now face only reputational damage and curbs on small EU funding, but no heavier penalties by member states. – Reuters

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EU Commission gives green light to broadband plan

The European Commission has approved the Government’s National Broadband Plan, saying it complies with EU state aid rules.

The decision means one of the final hurdles preventing the State from signing the contract with the preferred bidder, National Broadband Ireland, has been overcome.

The Commission said the €2.6bn of public support will result in high-speed broadband services being brought to consumers and businesses in areas with insufficient connectivity in Ireland.

“The National Broadband Plan in Ireland is expected to address the significant digital divide between urban and rural areas in Ireland, enabling Irish consumers and businesses to benefit from the full potential of digital growth,” said Competition Commissioner Margrethe Vestager.

“This will help households and businesses in areas of Ireland where private investment is insufficient.”

The Commission assessed the planned measures under the EU state aid rules, including broadband guidelines dating from 2013.

It decided that the scheme’s “positive effects on competition in the Irish broadband market” outweigh potential negative effects brought about by the public intervention. 

The plan aims to bring download speeds of at least 150Mbps and upload speeds of 30Mbps to parts of the country where commercial operators claim it is not commercially viable for them to offer a service.

Services will be offered on a wholesale access basis to all operators and this will incentivise private investment in the provision of high-speed internet services in the areas concerned, the Commission said.

“The Irish authorities have developed a comprehensive mapping of available infrastructure and carried out numerous public consultations in order to determine the target areas,” it stated.

The decision has been welcomed by Minister for Communications, Richard Bruton.

“Today’s decision from the Commission allows the government to proceed towards signing the National Broadband Plan contract with National Broadband Ireland which will commence the roll out of 147,000km of fibre to homes, farms, businesses and schools across our country,” he said in a statement.

Department sources were unable to say how soon it would be before the contract is signed.

Google complying with EU order in shopping case, says Vestager

Google complying with EU order in shopping case, says Vestager

Google is complying with an EU order to boost competition in online shopping, Europe’s competition chief said today, brushing aside complaints from rivals demanding more regulatory action.

Google was hit with a €2.4 billion fine two years ago for unfairly promoting its own comparison shopping service.

But it has since offered to allow competitors to bid for advertising space at the top of a search page, giving them the chance to compete on equal terms.

European Competition Commissioner Margrethe Vestager said the measure appeared to be working.

“Now we are in a situation where in 75% of queries there would be at least one rival to Google in the shopping box and 40% of clicks would go to a merchant hosted by one of the rivals,” Vestager told reporters on the sidelines of a Centre for European Reform event.

“This means we do not have a non-compliance case but at the same time also means that we keep monitoring monthly developments,” she added.

Open Internet Project, a Google critic, however argues that the situation has not improved.

“By putting these Google-powered Shopping Units at the top of every relevant results page, above more relevant comparison services, Google continues to reserve the important market for comparison shopping services to itself,” Open Internet Project said in a statement last week.

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EU gets green light for US trade talks

EU gets green light for US trade talks

EU countries gave initial clearance yesterday to start formal trade talks with the United States, EU sources said, in a move designed, but not guaranteed, to smooth strained relations between the world’s two largest economies.

The European Commission has sought clearance for two negotiating mandates – one to cut tariffs on industrial goods, the other to make it easier for companies to show products meet EU or US standards.

The commission presented its mandates in January and found support from most EU members. France resisted, however, insisting that agriculture should not feature in the talks but that climate change provisions should – a difficult demand given US President Donald Trump’s withdrawal from the Paris climate agreement.

The EU and the US reached a detente last July when Trump agreed to hold off from imposing punitive tariffs on EU cars as the two sides sought to improve economic ties.

US tariffs still apply to EU steel and aluminium, however, while Trump has threatened further tariffs on €9.8bn of EU products related to a long-running aircraft subsidy dispute.

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