Vienna (PC) – The Commission presented a legislative package to redesign the EU’s economic governance and tax rules, which was discussed today in the EU subcommittee of the National Council, as well as the union of capital markets and measures to prevent money laundering capital and terrorism financing. Finance Minister Magnus Brunner is optimistic about the project, the FPÖ insisted on protecting fiscal policy benchmarks and cash as a means of payment, but remained in the minority with corresponding requests.
Redesigning EU tax rules
The European Commission’s legislative package includes proposed regulations on economic policy coordination and the excessive deficit procedure, as well as a proposal for a directive on the fiscal framework to improve debt sustainability.
The core element of the new regulation of the preventive component of EU fiscal rules is national medium-term structural fiscal policy plans in which member states define a net spending path for a period of four years within specified limits or up to seven years. in the case of corresponding renovations and investments.
As the most far-reaching change in the corrective component of the EU fiscal rules, the previous 20th rule to reduce the debt ratio to 60% of GDP will be dropped and the focus will be on adhering to the net expenditure path specified in the preventive component. The deficit (3% of GDP) and debt ratio (60% of GDP) reference values remain unchanged. If the deficit exceeded the 3% reference value, a minimum annual adjustment of 0.5% of GDP would be required.
The role of supervisory boards is reinforced and the minimum requirements for their composition, mandate and functioning are defined. Discussions at EU level have already started, with the aim of completing the legislative work later this year, so that the revised budgetary rules can be applied from 2024. According to the Minister of Finance, Magnus Brunner, this timetable is quite realistic , he responded to a question from Karin Doppelbauer (NEOS). If there is no agreement, the old rules, suspended until the end of 2023 due to the crisis, would return to force.
Clarity and transparency in the application of tax rules are important to Brunner. It’s about making them simpler, more effective and more sustainable so we can react to challenges. After all, the interest rate environment in the eurozone has changed. Target values would represent an important anchor. If the rules are broken, the sanctions must remain in force, the minister said in a discussion raised by Andreas Hanger (ÖVP) and Karin Doppelbauer (NEOS) about their applicability. Under the Commission’s proposal, the penalties would be quite small, but would also be easier to implement, the finance minister said on a “matter of consideration”. Hubert Fuchs (FPÖ) disagreed. So far, the criteria have not been met and no Member State has paid a fine. In terms of applicability, nothing will change in the future, he said.
The FPÖ categorically rejects the proposal as well as a joint indebtedness of the EU member states and asked the Minister of Finance through a request for an opinion on an EU-wide campaign for the preservation of the defined fiscal reference values. Her group has been critical of the EU’s debt policy for years, said Petra Steger (FPÖ), who also saw the Commission’s proposal as a cut into the sovereignty of member states. They would have to hand over sovereignty over their budget. The request was rejected.
Jakob Schwarz (Greens) emphasized the presentation of climate-related implications of EU tax rules and the need for investment in the green and digital transition. Kai Jan Krainer (SPÖ) argued that necessary climate investments should not be included in the Maastricht deficit.
New Union of Capital Markets
Also discussed was a Commission communication on the package of measures for the new Capital Markets Union (CMU) to strengthen capital markets and EU competitiveness. To this end, companies’ access to capital and liquidity should be improved, on the one hand, and investors and private clients to investment opportunities, on the other. The Minister of Finance, Magnus Brunner, explained that the expansion of financial education, the elimination of cross-border obstacles and the reduction of administrative costs are also planned. Legal certainty and consumer protection must be improved and existing shortcomings eliminated, which is why Austria supports the objectives of the CMU.
In this context, Martin Engelberg (ÖVP), Michel Reimon (Greens) and Karin Doppelbauer (NEOS) learned about the strategy for small investors to facilitate their access to the capital market. The objective is to strengthen confidence in the capital market and thereby increase participation, said Brunner. In his opinion, a commission ban should be limited to only so-called “execution only” orders. The Minister of Finance also told the representative of NEOS that the Venture Capital Funds Law supports start-ups in strengthening their capital. Eva Maria Holzleitner (SPÖ) raised the issue of “greenwashing”. A proposal for a uniform definition is currently being worked on at EU level. Brunner responded to another question from SPÖ MPs that her position on a uniform deposit insurance system ranged from cautious to skeptical.
Prevention of money laundering and terrorist financing
A regulation is also proposed to prevent the use of the financial system for the purposes of money laundering and financing of terrorism. Uniform EU standards are planned, along with stricter measures against the use of crypto-assets, which the Austrian federal government welcomes, as well as the establishment of a new European money laundering authority, the “Anti-Money Laundering Authority” (AMLA ). Austria has applied for his seat, Finance Minister Magnus Brunner said. The procedure for listing third countries as high risk countries for money laundering and terrorist financing should be reviewed. As part of the legislative package, the Commission proposes a cash payment limit of €10,000. However, each member state can decide independently on introducing a corresponding reporting obligation, explained Brunner. Austria wants to keep that freedom of choice.
The FPÖ addressed its fear of a possible restriction of cash as a means of payment. Big changes would start small and discreet, said Hubert Fuchs (FPÖ), in view of the discontinuation of the €500 note, the planned introduction of the digital euro and cash payment limits. In his opinion, these are steps towards abolishing cash transactions. According to him, the fight against money laundering and terrorism is just a cover. An FPÖ motion for a statement on rejecting a maximum limit on the use of cash was only supported by Karin Doppelbauer (NEOS) and thus remained in the minority.
Georg Strasser (ÖVP) and Elisabeth Götze (Greens) welcomed the preventive measures in the context of crypto assets becoming increasingly popular money laundering instruments. Kai Jan Krainer (SPÖ) pointed out that money laundering, for example in drug trafficking, still takes place using cash. From his point of view, verification mechanisms above a certain value make sense; he suggested a limit of €15,000. He also said it should be possible to investigate reports of suspicious activity more effectively. Brunner considered the systems sufficient. (close) fan