EU Member States should benefit from the Capital Markets Union
On Saturday 25 April, at the second session of the informal meeting of the Economic and Financial Affairs Council (ECOFIN), one of most important issues on the agenda was the further development of the Capital Markets Union concept, which was broadly supported by the ministers and Governors of central banks.
Given that the creation of the Capital Markets Union is an important long-term project, a clear structure and principles should be established. The Ministers and Governors of central banks agreed that the Member States should identify the obstacles hindering the equal development of capital markets across the EU, because the activity of private and institutional investors needs to be promoted and the fragmentation of financial markets in the EU reduced. In addition, necessary structural reforms should be identified so that the Capital Markets Union can ensure opportunities for cooperation for private and institutional investors and entrepreneurs.
“It is important to develop a concept under which all European Union Member States benefit from the Capital Markets Union, including financial markets that are less well-developed and less attractive to investors,” noted Latvian Finance Minister and current ECOFIN President Jānis Reirs.
The Capital Markets Union is an important instrument for increasing the amount of private and institutional investments in European businesses and infrastructure. Accumulated private capital must become a source of funding both for profitable projects and for rapidly growing businesses in smaller and less well-developed markets.
“Small and medium-sized enterprises should be given the opportunity to attract investors from all the European Union Member States as easily as possible. Only by encouraging our people to invest in competitive products and businesses, the European Union can restore dynamic growth in a competitive Europe,” emphasised the Minister.
Summarising the information about the Capita Markets Union provided by the Ministers and Governors of central banks, the Presidency will prepare draft Council Conclusions so that they could be adopted at the ECOFIN meeting in June.
The fight against tax evasion and aggressive tax planning is one of the EU’s top priorities. The participants therefore discussed an EU Action Plan on Base Erosion and Profit Shifting (BEPS)successfullydeveloped by the Latvian Presidency, as well as its implementation schedule and priorities.
BEPS is a consequence of different national tax regulations. It allows artificial shift of profits from their country of origin to low-tax and offshore countries and territories. Many international companies have used this to considerably reduce their tax liabilities against national budgets.
The Ministers and Governors of central banks focused their attention on certain aspects of the EU BEPS plan – amendments to the Interest and Royalties Directive and further activities by the Code of Conduct Group on Business Taxation. The European Commission’s proposal for the automatic exchange of information on tax rulings was also discussed.
“I believe that both issues discussed at today’s ECOFIN meeting will contribute significantly to the promotion of sustainable economic growth in the European Union,” noted the Latvian Finance Minister. European Union
