MEMBER STATES STRUGGLE TO AGREE ON DIGITAL SERVICES TAX
EU finance ministers discussed the proposed Digital Services Tax during their Economic and Financial Affairs Council meeting. Whilst most Member States expressed support for the proposal, several countries outlined their concerns and stated their intention to focus on international solutions at the OECD instead. As a result, Germany called on the Commission to revise its proposal and commit to implementing such a revised solution if consensus cannot be reached by 2020. Thus, if the OECD does not reach a solution globally, the EU tax would kick in. The Council Working Party on Tax Questions will continue discussions on 12 and 21 November.
EBA PUBLISHES STRESS TEST RESULTS
The European Banking Authority (EBA) published the results of its 2018 EU-wide stress test. The exercise, which sought to assess the resilience of banks to a common set of adverse shocks, involved 48 banks from 15 EU and European Economic Area (EEA) countries, covering 70% of total EU banking sector assets. Overall, findings found there are geographical vulnerabilities (affecting mostly Germany and the UK), increases in the aggregate capital ratio, negative Common Equity Tier 1 (CET1) trajectory and negative impact of the International Financial Reporting Standard (IFRS) 9 accounting standards. Next, the EBA will conduct a transparency exercise in December 2018.
MANFRED WEBER ELECTED EPP’S SPITZENKANDIDAT
Manfred Weber was elected the European People’s Party (EPP) lead candidate, or Spitzenkandidat, for next year’s EU elections. Weber received the backing of an overwhelming majority (79.2%) of EPP members at the congress held this week in Helsinki, with Alexander Stubb gathering some 20% of votes. Following the announcement of the result, Weber gave an acceptance speech in which he stressed the need for the party to remain united. He also received the full support of his contender. Much can change before the May 2019 elections, since it is still unclear whether the Spitzenkandidat process will be followed at the end.
NEW ANTIBIOTICS RULES WELCOMED BY PARLIAMENT
Members of the European Parliament have welcomed the adoption of new EU-wide rules on the use of antibiotics in animals as a “major step forward” for public health. The new rules will limit the use of antimicrobials to single animals and not groups. Such drugs can be used only when “fully justified” by a veterinarian and not to enhance the growth of animals. While the rules specifically focus on plants and animal welfare, it is hoped they will also raise public awareness about benefits of the responsible use of antibiotics. The rules are to be formally approved by the Member States.
PARLIAMENT COMMITTEE ADOPTS REPORT ON SUSTAINABLE FINANCE
The European Parliament’s Economic and Monetary Affairs Committee adopted a report on the disclosures relating to sustainable investments and sustainability risks. The key changes introduced to the original Commission’s proposal are the expansion of the scope of the Regulation to include credit institutions, and the expansion in scope so that all financial services will be subject to the disclosure requirements laid out in the Regulation. The Committee also voted to directly enter into trilogue negotiations as soon as the Council has finalised its position. Separately, the Council adopted its conclusions on the financing aspects of climate change ahead of the COP24 conference in Katowice.
COMING UP NEXT WEEK
• 12 November: General Affairs Council. On the agenda: Brexit, rule of law in Poland, Hungary, 2019 Commission work programme, multiannual financial framework.
• 12-15 November: European Parliament Plenary. On the agenda: Clean Energy package, Future of Europe (with Chancellor Merkel), CO2 emission standards for trucks.
• 14 November: EU-Albania Stabilisation and Association Council. On the agenda: state of relations under the Stabilisation and Association Process.
• 15 November: EU-South Africa summit. On the agenda: economic, trade and investment cooperation, climate change, global challenges.
• 16 November: Economic and Financial Affairs Council (Budget). On the agenda: EU’s general budget for 2019.
Karl Isaksson, Managing Partner Brussels, Kreab