Informal video conference of economic and finance ministers, 16 March 2021 - Main contents
Main results
Digital taxation
Ministers exchanged views on the state of play and way forward on tax challenges arising from the digitalisation of the economy. The discussion took place ahead of the European Council meeting in March, where EU leaders are also expected to discuss this issue.
During the exchange of views ministers underlined their continued support for the ongoing negotiations in the OECD, which are aimed at achieving a global and consensus-based solution by mid-2021. They took note of the momentum, expressed hope for swift progress and highlighted their readiness to engage in reaching a global agreement. Ministers also confirmed their readiness to examine solutions for the EU to address the tax challenges arising from digitalisation, should there be no progress in the G20/OECD format.
The Commission confirmed that it is working on a legislative proposal for a ‘digital levy’, which will be designed as a source of additional own resources for the EU. It highlighted that this would be a separate instrument which should not be linked with the corporate tax rules that are being negotiated in the G20/OECD.
The presidency noted that the Council conclusions of 27 November 2020 on digital taxation remained valid for the way forward in this area.
All member states agree that it is in their interests to provide room for the ongoing negotiations in the OECD on the reform of the corporate taxation rules. Finding a global consensus, in a multilateral context, is the right way forward. We have also confirmed that we are willing to find a European solution, should there be no progress at the OECD-level talks. We are looking forward to a Commission proposal for a digital levy, which should be a separate instrument, not linked with the corporate tax rules that are being negotiated in the OECD.
João Leão, Portugal’s Minister for Finance
Economic recovery in the EU
Ministers took stock of the current economic situation and outlook. They heard a presentation by the European Banking Authority on the economic and financial situation in the EU and a presentation by the European Central Bank on its latest forecasts.
The Commission presented its communication ‘One year since the outbreak of COVID-19: Fiscal policy response’. Ministers had an exchange of views on the conduct of fiscal policy against the current background of uncertainty and recovery prospects. They took good note of the arguments presented by the Commission as regards the application of the general escape clause in the Stability and Growth Pact. They agreed that fiscal support should not be withdrawn too early, but at the same time that member states will have to adapt their policies at an appropriate time to ensure fiscal sustainability over the medium term.
The Commission is expected to set out more detailed guidance for fiscal policies in its European Semester spring package.
Ministers also took stock of the implementation of the Recovery and Resilience Facility and progress in the ratification of the own resources decision.
Following the entry into force of the regulation establishing the Recovery and Resilience Facility (RRF) in February, member states can now officially submit their recovery and resilience plans to the Commission. The presidency noted that many member states are already at an advanced stage of preparation of their plans and recalled that European-wide recovery will benefit from the swift implementation of the RRF. The Commission highlighted areas where further progress is needed and underlined the need for full alignment between the draft national plans and the RRF regulation.
Ministers also discussed the priorities of the recovery and resilience plans following their exchange of views on the plans in January and February.
Member states have been working hard on their recovery and resilience plans. It is now time to step up efforts to deliver. I am looking forward to first official submissions of national plans in the coming weeks.
João Leão, Portugal’s Minister for Finance
Retail payments
The presidency informed ministers that, following an agreement reached at technical level, the Council is scheduled to adopt conclusions on the retail payments strategy, without discussion, at the meeting of the Agriculture and Fisheries Council on 22-23 March.
The strategy was presented by the Commission on 24 September 2020 and sets out a comprehensive framework for the further development of the retail payments market in the EU. In the draft conclusions, the Council provides a strong political mandate to the Commission for taking forward initiatives in this field, including to promote the use of EU-wide instant payment solutions and to accompany the development of a digital euro. It also highlights the many challenges to be taken into account, such as financial inclusion, security and consumer protection, data protection and anti‑money laundering aspects.
Other items
The presidency and the Commission briefed ministers on the outcome of the February meeting of the G20 finance ministers and central bank governors. The presidency also informed ministers about preparations for the G20 finance ministers and central bank governors and IMF spring meetings due to be held in the week of 5 April.
Ministers took note of the state of play of legislative proposals and the implementation of directives in the field of financial services.
Meeting information
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-Meeting n°VTC-ECOFIN-160321
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-Brussels
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-16 March 2021
Preparatory documents
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