Welcome to Better Europe’s weekly update on EU Affairs.
FROM SEGRE TO SEJOURNE: SIXTY YEARS OF SIU
Uniting Europe’s capital markets. Sounds easy, turns out to be actually quite difficult. Almost sixty years ago, the EU published professor Claudio Segré’s report on “the development of a European capital market” explaining why Europe’s capital markets lacked integration. The reasons? Lack of a single currency, of course. But also: “disparities” in the supervision of financial institutions and tax obstacles. Fast forward sixty years later, after the attempts by Mario Monti in 1999 (Financial Services Action Plan) and Jonathan Hill in 2015 (Capital Markets Union) – again, the EU plans to address supervision and tax issues, with its rebranded Savings and Investment Union presented this week. No wonder some call it old wine in new bottles. This time, the Commission is proposing more securitisation, a revamp of the personal pension product, and even an EU savings account. All very interesting, but you will have guessed the two major points on which the package shies back compared to earlier drafts: harmonised supervision and taxation barriers for cross-border investments.
EU LEADERS UNDER PRESSURE TO DELIVER ON COMPETITIVENESS
EU leaders met on Thursday for high-level talks on Europe’s competitiveness, aiming to boost the bloc’s prosperity, resilience and global influence in the face of growing challenges. Building on the Budapest Declaration and recent Commission proposals – including the Competitiveness Compass, the Clean Industrial Deal, and the Omnibus I and II packages – the debate focused on three priorities: simplification, energy, and the new Savings and Investment Union. Leaders urged the Commission to continue “stress-testing” the EU rulebook to cut red tape and to quickly follow up with new “omnibus” simplification efforts, notably on industrial decarbonization and defence. Von der Leyen didn’t hold back on the state of EU finances, calling the capital market “still fragmented and complicated.” To address this, leaders backed a new single market strategy due in June aimed at removing remaining barriers, especially in services and essential goods and improving enforcement of existing rules.
CAN TAX REFORM REALLY PROMOTE SUSTAINABILITY AND COMPETITIVENESS?
Earlier this week, the Parliament’s Hemicycle hosted the EU Tax Symposium, where policymakers, experts, and tax geeks (yes, they exist!) gathered to discuss the ever-difficult balance between competitiveness and fairness in taxation. Commissioner Wopke Hoekstra emphasized the need for tax policies to “evolve to avoid creating market distortions,” with the clean intention of simplifying the tax landscape. Hoekstra also reaffirmed the EU’s commitment to international tax cooperation at the OECD, stating that the underlying logic of the global minimum tax agreement is as relevant today as it was years ago. “The bottom line is that this OECD agreement matters,” he added, underscoring the importance of global cooperation in shaping tax policy. A major focus of the conference was on how taxation can promote sustainable competitiveness, highlighting tax incentives such as immediate expensing, accelerated depreciation and tax credits to encourage greener industries. In the end, the conference succeeded in sparking some much-needed discussions on sustainable competitiveness, but the real challenge is to turn these ambitious goals into tangible results.