Policy recommendations

  • The European Savings Directive needs to be extended by the European Member States. The automatic exchange of information should include companies and trust funds as well. This creates the opportunity to get information on MNCs as well as individuals, and it would make it more difficult to evade taxes.
  • The European Commission should be mandated to impose strict penalties on Member States which do not comply with good governance in tax matters, like the Member States that still support tax havens on their territories.
  • The European Union, on behalf of the Member States should oblige country-by-country reporting for MNCs enlisted in the EU.
  • The European Union should oblige MNCs to disclose the beneficial ownership, which would create transparency on transfers between companies, and increase the chance of ending transfer pricing.[28]

Case: Fair Taxes

23-03-2011 Thijs Berman addresses PCD and tax evasion to European Investment Bank

MEP Thijs Berman (S&D) on behalf of the DEVE committee wrote an opinion on “Granting an EU guarantee to the European Investment Bank (EIB) against losses under loans and guarantees for projects outside the European Union”. Next to the core mission of financing operations in the European Union, the EIB also finances projects outside of the EU, in accordance with the EIB’s external policy, by which the EIB contributes to the general guiding principles and policy objectives of the European Union,

In the DEVE opinion, Berman refers to Article 208 of the Lisbon Treaty which states that the EU must ‘take account of the objectives of development cooperation in the policies that it implements which are likely to affect developing countries’. For achieving greater coherence the opinion states that, the EIB must align its external activities with the European consensus on development and the EU’s development objectives. Fair Politics  is pleased to see that MEP Berman addresses PCD very strongly in the DEVE opinion.

Furthermore in the opinion the further economic downturn is addressed, by which the poorest countries are hit the hardest. Therefore the EIB should consider allocating its external lending to other countries, ensuring that EIB projects effectively reduce poverty. In this way it can ensure that disadvantaged groups can equally enjoy access to credit. Next to this, to cover more loans in developing countries, it would be appropriate for the EIB to finance a greater share of its loans in ‘lower-risk’ countries without recourse to the EU guarantee. The EIB should aim to help fill the large gaps left by traditional financial institutions.

Finally, the EIB should update its policy on offshore financial centres and go beyond the existing level playing field of OECD lists and take account of all jurisdictions that might allow tax avoidance or evasion in developing countries. This should include the disclosure of beneficial ownership of financial assets. Tax evasion is a major issue for developing countries, as they miss out on huge amounts of money, more than is received by aid budgets. Fair Politics is glad to see that MEP Berman addresses tax evasion as an important issue to which also the EIB needs to fight; more information is given in our Tax-case.

Fair Politics would like to reward MEP Berman with two points in our monitoring system towards the Fair Politician of the Year 2011 elections for addressing PCD and the problems concerning tax evasion to be important for the EIB.