Past Event

Reforming decision-making for EU taxation policy

How should the EU taxation policy be reformed?

Date: February 21, 2019, 1:30 pm Topic: European Macroeconomics & Governance

Video and audio recording

Event materials

Speech by Pierre Moscovici

European Commissioner Pierre Moscovici was at Bruegel to discuss the European Commission’s proposal for a transition to qualified majority voting (QMV) in certain areas of shared EU taxation policy.

summary

This event, which was moderated by Dr. Guntram Wolff, involved a debate on whether or not the EU should move toward a Qualified Majority Voting (QMV) System in regards to EU taxation and away from the unanimity system that currently exists. The EU Commission recently published a paper on the subject, and the keynote address was given by Pierre Moscovici, the Commissioner for Economic and Financial Affairs, Taxation, and Customs.

To open his address, Moscovici began by asking the rhetorical question of why now is the time for change. He said that if the issue of QMV voting and taxation had been raised earlier, it would have been shut down for political reasons. Now is the opportune to bring this issue to debate, however, because of the nearing European Parliament elections.

Moscovici emphasized that QMV can be utilized without violating the principle of subsidiarity, claiming that the move to QMV will benefit EU countries in all sorts of ways. In order to support this claim, he provided four main problems with unanimity voting.

First, he explains that the principle of unanimity was something that was necessary for the 20th century, but not for today. He explains that it was necessary to appease fears of loss of sovereignty as the EU was in its infant form. Today, QMV is used for many issues, and Moscovici asks why should it not be used for taxation as well?

Second, he claims that the principle of unanimity no longer protects national sovereignty. Rather, it prevents the emergence of genuine European sovereignty in tax matters. It is more important for member states to fear the loss of sovereignty that results from the inability to collect public revenues than the harmonization of rates proposed by Brussels.

Third, Moscovici argues that unanimity costs EU states billions each year in lost revenues from taxation. There are many digital companies that are currently evading taxes under the current system.

Lastly, He states that unanimity is harmful because it weakens true democracy at the EU level. One of the big issues that the EU faces is that many individuals see it as an inefficient bureaucracy. The fact that “majorities” can’t see their ideas implemented contributes to the popularity of this viewpoint. If the EU moved to QMV, this situation would be avoided and more states would feel that their voice is heard.

After Moscovici’s speech concluded, Paola Profeta (Associate Professor, Department of Social and Political Sciences, Bocconi University and Joannes Becker (Professor and Director of Institute of Public Economics, University of Muenster) participated in a panel discussion. Dr. Profeta placed emphasis on the fact that there is room for improvement in European integration and a more coordinated tax-policy through the implementation of QMV voting is a good step to take in order to achieve this. She also highlighted the issues that can come about since EU states are not homogenous and heterogenous states have different preferences for taxation policies. Similarly, Dr. Becker explained that there are many difficulties when dealing with heterogeneous states. He states that the goal should definitely be a move away from unanimity, but if it cannot be achieved now, he advises that the EU focus on creating laws that make it more difficult for countries to compete with tax rates. This, he argues, would make unanimity less appealing to member states who want to use the system to diverge from Brussels’ recommendations.

In the Q&A section, there were questions raised regarding the sovereignty issue that many smaller EU economies (Ireland, for instance) will feel due to the fact that they tend to have different preferences for taxation than France and Germany. There were also audience concerns about over taxation of individuals, to which the panel responded by saying that these taxes would primarily be corporate and not income taxes.

Notes by Davis Cousar

Schedule

Feb 21, 2019

13:30-14:00

Check-in and welcome coffee

14:00-14:25

Speech

Pierre Moscovici, European Commissioner for Economic and Financial Affairs, Taxation and Customs

14:25-15:00

Discussion

Chair: Guntram B. Wolff, Director

Johannes Becker, Professor and Director of Institute of Public Economics, University of Muenster

Pierre Moscovici, European Commissioner for Economic and Financial Affairs, Taxation and Customs

Paola Profeta, Associate Professor, Department of Social and Political Sciences, Bocconi University

15:00-15:30

Q&A

15:30

End

Speakers

Johannes Becker

Professor and Director of Institute of Public Economics, University of Muenster

Pierre Moscovici

European Commissioner for Economic and Financial Affairs, Taxation and Customs

Paola Profeta

Associate Professor, Department of Social and Political Sciences, Bocconi University

Guntram B. Wolff

Director

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Katja Knezevic

[email protected]

Read about event More on this topic
 

Past Event

Past Event

The Euro area after COVID-19 - a conversation with Mario Centeno

At this event we will welcome Mario Centeno to talk about his time as President of the Eurogroup and reflect on the future of the Euro area.

Speakers: Mário Centeno and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: July 1, 2020
Read about event More on this topic
 

Past Event

Past Event

The need for market-based finance after COVID-19

How do COVID-19-caused financial dislocations inform policy responses?

Speakers: Maria Demertzis, Gabriel Makhlouf and Guntram B. Wolff Topic: Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 29, 2020
Read about event More on this topic
 

Past Event

Past Event

Redefining Europe's role after the COVID-19 pandemic

Amidst COVID-19: how to keep markets integrated when states play a bigger role in the EU and its neighbourhood?

Speakers: Gabriele Bischoff, John Erik Fossum, Kalypso Nicolaïdis and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 25, 2020
Read about event More on this topic
 

Past Event

Past Event

The role of AI in healthcare

How can AI help us fight through a pandemic crisis?

Speakers: Dimitris Bertsimas, Georgios Petropoulos, Effy Vayena and Reinhilde Veugelers Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 23, 2020
Read about event More on this topic
 

Past Event

Past Event

Biological threats and EU preparedness: How can we make the system more resilient?

Can the EU handle biological threats?

Speakers: Maria Demertzis, Magnus Normark, Ilkka Salmi, Jukka Savolainen, Anne Sénéquier and Reinhilde Veugelers Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 18, 2020
Read article
 

Blog Post

One last push is needed to improve the Just Transition Fund proposal

The European Parliament and the Council still have an opportunity to improve the Just Transition Fund by refocusing it on social support and basing fund allocations on more granular information that takes into account not only countries’ needs but also their green ambitions.

By: Aliénor Cameron, Grégory Claeys, Catarina Midões and Simone Tagliapietra Topic: Energy & Climate, European Macroeconomics & Governance Date: June 11, 2020
Read about event More on this topic
 

Past Event

Past Event

The Sound of Economics Live: Rebooting Europe - a framework for post COVID-19 economic recovery

Mapping out the post COVID-19 recovery.

Speakers: Maria Demertzis, Giuseppe Porcaro, Simone Tagliapietra and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 15, 2020
Read about event More on this topic
 

Past Event

Past Event

Democracy in the times of COVID-19 with Věra Jourová

How can Europe uphold its democratic values while fighting COVID-19?

Speakers: Sam Fleming, Věra Jourová and Michael Leigh Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 14, 2020
Read article More on this topic
 

Blog Post

EU trade in medical goods: why self-sufficiency is the wrong approach

As countries are struggling with the COVID-19 pandemic, shortages in medical equipment led to EU export controls and war-time like procurement of respirators. While the crisis is still unfolding, there is a debate on whether the EU is too reliant on global value chains for medical goods. Looking at the world market of medical goods for the EU, we argue that self-sufficiency is the wrong approach. Global medical markets are to the benefits of the EU and stockpiling and preparation are more effective in preparing for emergencies.

By: Sybrand Brekelmans and Niclas Poitiers Topic: Global Economics & Governance Date: April 14, 2020
Read article More on this topic More by this author
 

Blog Post

What the EU should do and not do on trade in medical equipment

The European Union has introduced export controls on some medical supplies. This was a mistake. It should announce that it is withdrawing the measure, and call on other countries to do the same.

By: André Sapir Topic: European Macroeconomics & Governance Date: March 25, 2020
Read article Download PDF
 

External Publication

Analysis of developments in EU capital flows in the global context

This report presents an overview of the recent trends of capital flows, focused especially on the past year. It provides a detailed analysis at the global level and at the European Union level.

By: Grégory Claeys, Maria Demertzis, Marta Domínguez-Jiménez, Konstantinos Efstathiou and Tanja Linta Topic: European Macroeconomics & Governance Date: March 16, 2020
Read article Download PDF More on this topic
 

External Publication

The effect of digitalization in the energy consumption of passenger transport: An analysis of future scenarios for Europe

The paper evaluates the effects on energy consumption of digitalization in transport. Digitalization needs a tailored policy support to avoid higher energy consumption.

By: Simone Tagliapietra and Michel Noussan Topic: Energy & Climate Date: March 16, 2020
Load more posts