Spanish Finance Minister Elena Salgado is having a series of meetings with her EU counterparts to try to hammer out an accord on a revision of the Savings Tax Directive ahead of a Council meeting, on 19 January. EU finance ministers will convene in Brussels to make up ground lost in December 2009, when Austria and Luxembourg put their foot down over the automatic sharing of savers’ bank account information (see Europolitics3874).

Changes to Directive 2003/48/EC were proposed in November 2008 to close loopholes for interest paid via tax-exempt trusts and charities, as well as to include interest payments on life insurance and other complex financial products. The revision is being negotiated alongside anti-fraud agreements with Switzerland, Liechtenstein, Andorra, San Marino and Monaco, as well as two directives on administrative cooperation (COM(2009)29) and tax recovery (COM(2009)28).

Moves to combat tax evasion have intensified since last April’s G20 meeting in London, when the Organisation for Economic Cooperation and Development (OECD) published a black list of tax havens, naming and shaming the five non-EU tax centres – alongside Austria, Luxembourg and Belgium – for not following through on promises to sign tax information exchange agreements with at least 12 other countries (the internationally agreed standard).

Austria and Luxembourg – as well as Belgium - have a temporary opt-out under EU savings tax rules, which came into force in 2005, allowing them to continue applying a withholding tax to non-residents’ interest payments, rather than swapping bank account data with other countries. But if Liechtenstein and the other four non-EU states agree to exchange information on request – which is part and parcel of the new anti-fraud agreements – it will trigger the end of the EU’s transitional period. It means Austria, Belgium and Luxembourg will have to switch to automatic data sharing with other EU member states, while Switzerland and the rest of the non-EU jurisdictions will not. Luxembourg is furiously opposed to mandatory data-sharing if foreign tax shelters are not subject to similar rules, while France is pushing to tighten up standards across the board.

GREECE

Greece will not escape ministers’ notice after a Commission report from 8 January (COM(2010)1) found “severe irregularities” in the country’s deficit and debt statistics. In October 2009, Greece told the EU executive – as part of the excessive deficit procedure, in which 20 EU member states currently find themselves – that it had underestimated its 2008 figures and 2009 predictions. The Greek deficit last year – which is the highest in the EU – stood at 12.7% of GDP, while 2009 gross debt was just under 113%, both of which are well above the EU’s limits (of 3% of GDP for deficit and 60% for debt, under the Stability and Growth Pact). The Commission report said there were shortcomings in the way the country’s national statistics office, the NSSG, operated, citing “non-transparent” and “improperly documented” bookkeeping. Draft Council conclusions seen by Europoliticscall on Greece to develop an action plan by next month to overhaul how it gathers and presents data to Eurostat. Greece will also have to defend itself in front of its eurozone partners in a Eurogroup meeting, on 18 January (see separate article).

PRESIDENCY PROGRAMME

Salgado’s mettle will also be tested as she presents the Spanish Presidency’s work programme for the next six months. Top of her list will be to wind down crisis spending (including a follow-up of financial market legislation, ie supervision and hedge funds), the EU’s new ‘2020 strategy’, cementing the EU’s role in the G20, climate finance and fighting tax fraud (see above). “The greatest challenge in the coming months will be to outline an ambitious exit strategy in both the short and long term,” the programme says. “However, exit strategies must not only be defined as the withdrawal of exceptional policies, but also as the adoption of new measures that will promote a more stable, balanced and sustainable growth.” This is where the EU’s ‘2020 strategy’ will come properly into play, focusing on creating ‘green’ jobs and a knowledge economy (see separate article).