Panama Papers | EU ministers propose ‘urgent’ measures

EU finance minister have endorsed a series of measures to fight tax evasion following the Panama Papers which revealed massive international tax evasion.

"The sense of urgency is definitely much bigger," said Jeroen Dijsselbloem, the head of the Eurogroup. "We've been (so) very busy competing with each other ... that big companies tend not to pay taxes.”

EU ministers however advised caution: according to Reuters, German Finance Minister Wolfgang Schaeuble questioned the effectiveness of the Commission's plan and indicated German federal states opposed public disclosure of companies' tax data.

"Many people and entities are more willing to share information when they do not have to fear the effect of a public pillory," he said, backing disclosure only to tax authorities.

Malta’s finance minister Edward Scicluna was quoted as saying “we should not overreact”.

"We would prefer that as a first step, (corporate tax data) should be available to tax authorities, not to the public."

Belgian Finance Minister Johan Van Overtveldt said the ministers "have to be careful about privacy rights."

In a statement, the Finance Ministry said that Scicluna welcomed the Council`s commitment to take a step forward in improving the automatic exchange of tax information.

He said that Malta supported measures in favour of further transparency, whilst at the same time realising that such measures need to be taken in context and special attention given to their implementation, in order to remain competitive.

On Greece, the Eurogroup concluded that the policy package should include a contingent package of additional measures to be implemented only if necessary to reach the primary surplus target for 2018. The contingency mechanism needs to be credible, and be based on objective factors.

“Contingency measures give comfort to the creditor countries and serve as a backstop to the first set of measures, however, our Parliament would definitely object to any haircuts on the debt. Haircuts are not simply a technical issue, they are a political one,” Scicluna said.

Finance Ministers discussed the strengthening of the banking union and in particular the regulatory treatment of sovereign exposures.

Scicluna stressed that during the financial crisis, Malta needed no bank bailouts, while in the aftermath it watched other countries having their debt sustainability worsening due to global speculation increasing their spreads due to the national debt held by outside entities. 

“At that time, my country felt protected with a high ratio of debt being held by local financial institutions and domestic house loans. We believe there are more real risk sharing and risk reduction initiatives on our table to deal with before we look at this newly perceived risk,” he said during the meeting.

Other agenda points addressed during the ECOFIN meeting were the European Union’s Stability and Growth Pact.

Scicluna’s intervention stressed the importance of aiming for robustness and consistency whilst adjusting the debt, deficit and expenditure rules and not simply going for an overhaul based on subjective assumptions.  He said that he would like to see more work done on improving cyclical adjustment procedures.

The ECOFIN meeting was preceded by the Eurogroup session on Friday 20 April 2015.

For the meetings, the Minister for Finance was accompanied by the Permanent Secretary Alfred Camilleri, Governor of the Central Bank, Josef Bonnici, Chief of Staff Tania Brown, Director for Affairs Ms. Diane Muscat, and Policy Officer with the PREU Sandrell Sultana.