In a bid to crack down on international tax havens, EU finance ministers in Brussels on Tuesday endorsed a blacklist of 17 “non-cooperative jurisdictions”. The EU believe’s these territories are colluding in tax avoidance and have refused to commit to tax transparency and information exchanges with national authorities.
A further 47 states which have pledged to introduce transparency measures are listed in a “grey” list and will be closely monitored to ensure compliance. The EU has said the blacklisted states had failed to offer sufficient commitments that they would change their ways.
Beyond being named, countries currently face few consequences of being blacklisted
The decision was warmly welcomed by European commissioner for tax Pierre Moscovici who called the list an important step but warned that it was an "insufficient response to the scale of tax evasion worldwide".
The European Commission favours the more determined use of “defensive measures” or sanctions against the 17, such as restrictions on access to EU funds, he said. “Europe has taken a step forward, but the fight against tax havens must continue unabated,” he added.
Beyond being named, countries currently face few consequences of being blacklisted.
The 17 blacklisted jurisdictions are: American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, the Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia and United Arab Emirates (UAE).
The meeting also welcomed without debate work being done by the OECD for the G20 to prepare a report next spring on the fair international taxation of digital companies and agreed that the EU would contribute to that work. However, that would not stop the EU preparing its own EU-based measures, the ministers agreed, an emphasis that remains a disappointment to the Irish who favour international action.
Excessive deficit procedure
The council closed its excessive deficit procedure for the United Kingdom, confirming that its government deficit has dropped below the EU’s 3 per cent of GDP reference value.
Meeting as the informal Eurogroup on Monday, the 19 ministers elected a new chairman to succeed Dutch finance minister Jeroen Dijsselbloem in the new year when his mandate for the influential post ends.
Portugal’s finance minister Mário Centeno beat off three other candidates to become the first holder of the post from southern Europe and the first from one of the countries forced into a bailout by the euro crisis. A 50-year old socialist economist with a Harvard PhD, he is widely credited with helping to put Lisbon’s fiscal house in order.
Portugal has seen unemployment tumble by over half since its 2013 peak to 8.5 per cent – below the euro zone average. Growth is forecast at 2.6 per cent this year, compared to 0.9 per cent in 2014 when the country began to pull out of recession.
The new Eurogroup head will be responsible for overseeing Greece’s exit of its €86 billion bailout programme next summer and handling sensitive talks over debt relief. Mr Centeno will also help to steer discussion on Eurogroup governance reform.
