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EUROPEAN UNION

France, Germany, Spain and Italy to sidestep Hungary on global tax plan

Germany, France, Spain, Italy and the Netherlands said Friday they would implement an international minimum tax on big corporations, sidestepping Hungary's opposition to an EU-wide plan.

French Minister of the Economy and Finance Bruno Le Maire (R) and German Finance Minister Christian Lindner
French Minister of the Economy and Finance Bruno Le Maire (R) and German Finance Minister Christian Lindner speak with journalists as they arrive for an informal meeting of EU Economy and Financial Affairs Ministers and Central Bank Governors on September 9, 2022 in Prague, Czech Republic. (Photo by Michal Cizek / AFP)

The decision by the top European economies effectively ends months of effort to implement the tax jointly across all 27 member states.

The 15-percent minimum tax was one of two pillars of a major international agreement decided at the OECD and signed by more than 130 countries, including Hungary and the United States.

“Should unanimity not be reached in the next weeks, our governments are fully determined to follow through on our commitment,” the countries said in a joint statement.

“We stand ready to implement the global minimum effective taxation in 2023 and by any possible legal means,” the countries added.

French Finance Minister Bruno Le Maire, who initiated the joint text, said that “tax justice must be a priority for the European Union”.

“We will put in place minimum taxation from 2023, either through the European route or through the national route,” said Le Maire.

Christian Lindner, his German counterpart, said Germany will “if necessary” adopt the tax “independently of an agreement at the European level”.

The EU’s original ambition was that the 27-member bloc would be the first jurisdiction to implement the OECD-brokered agreement. The bloc-wide plan needed the vote of all EU countries in order to pass.

The resistance by Hungary came as the relationship with its EU partners remained fraught, with Budapest along with Warsaw seen as steering away from the bloc’s democratic values.

The Hungarian veto of the minimum tax is seen by many in Brussels as a means of pressure to obtain the release of seven billion euros ($7.3 billion) in grants planned under the European pandemic recovery plan.

Poland’s acceptance of the minimum tax came after Brussels accepted Warsaw’s recovery plan, which should see it receive 36 billion euros in grants and loans over the next several years.

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POLITICS

‘A good thing’ for footballers to express values, says France’s PM

France's Prime Minister Elisabeth Borne - speaking in Berlin - said that footballers should be allowed to express their values, amid controversy over FIFA's stance against the 'OneLove' armband on the pitch.

'A good thing' for footballers to express values, says France's PM

“There are rules for what happens on the field but I think it’s a good thing for players to be able to express themselves on the values that we obviously completely share, while respecting the rules of the tournament,” said Borne at a press conference in Berlin on Friday.

Germany’s players made headlines before Wednesday’s shock loss to Japan when the team lined up for their pre-match photo with their hands covering their mouths after FIFA’s threat to sanction players wearing the rainbow-themed armband.

Seven European nations, including Germany, had previously planned for their captains to wear the armband, but backed down over FIFA’s warning.

Following Germany’s action, Wales and the Netherlands have since come out to say they would not mirror the protest.

Borne’s visit to Germany was her first since she was named to her post in May.

Following talks with German Chancellor Olaf Scholz, the two leaders signed an agreement for “mutual support” on “guaranteeing their energy supplies”.

Concrete measures outlined in the deal include France sending Germany gas supplies as Berlin seeks to make up for gaping holes in deliveries from Russia.

Germany meanwhile would help France “secure its electricity supplies over winter”, according to the document.

France had since 1981 been a net exporter of electricity to its neighbours because of its nuclear plants. But maintenance issues dogging the plants have left France at risk of power cuts in case of an extremely cold winter.

The two leaders also affirmed their countries’ commitment to backing Ukraine “to the end of” its conflict with invaders Russia.

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