Bank account data exchange backed by EU

in Luxembourg

The European Union has agreed to back new rules on the automatic exchange of information on bank accounts, although Austria was given an extra year to comply if needed.

Following years of discussion, EU finance ministers gave the final sign-off to new legislation that will effectively write OECD standards of tax transparency relating to bank accounts into EU law.

The legislation, which will come into effect by January 1st 2017, is an update of the savings tax directive agreed in March.

Countries including Luxembourg and Austria have been facing increasing EU pressure to relax their bank secrecy laws, as Brussels attempts to clamp down on individual tax evasion.

The new rules, which supplement the savings tax directive agreed in March, will require banks to disclose details of accounts of customers who do not reside in the state in which the accounts are held.

The EU is in negotiations with Switzerland, Lichtenstein, Andorra, San Marino and Monaco, about implementing similar rules.

While Austria's finance minister Joerg Schelling said the country needed more time to adopt the rules, noting that the country had already introduced a host of politically difficult measures, he said the country would do so earlier "if technically feasible".

Ministers also reached political agreement on the need for an investment package for Europe, with a task force established between the European Investment Bank, European Commission and member states to explore possible investment projects in member states.

Investment requirement

“There is full agreement on the fact that we need more investment. We need both public and private investment, “ Italian finance minister

Pier Padoan

said following the meeting.

Despite political will behind an investment package, details of how such a scheme work remain sketchy.

However, incoming European Commission president Jean-Claude Juncker’s proposed €300 billion investment package for Europe is expected to feature strongly at next week’s EU summit.

On Monday, incoming commission vice-president Jyrki Katainen stressed that increasing capital for the European Investment Bank was not the only solution to the problem, saying private sector investment should also be leveraged.

On Italy’s own budget plans for 2015, Mr Padoan said discussions were ongoing with the European Commission.

“I am confident that our relationship with the European Commission is very constructive. We are within the rules, we use the flexibility within the rules, and we will have an open dialogue with the commission as usual.

“The 3 per cent [deficit] will be our aim, we will achieve that, and we will continue with structural consolidation.”

Discussions are ongoing between France, Italy, Germany and the European Commission in Brussels on the French and Italian budgets for 2015, ahead of today’s deadline for countries to submit their budgets to Brussels for scrutiny.

Unease over France

While Italy’s commitment to a “structural effort” of just 0.1 per cent is a cause of concern for the European Commission, most of the unease is centred on France which is already in the corrective arm of the EU’s stability and growth pact, and has consistently missed budget deficits.

Berlin and Paris are holding bilateral talks in an attempt to secure moves from France ahead of next week’s summit. However, Germany is coming under increasing pressure from its EU partners to cede some ground on investment and flexibility.

Meanwhile, the yields on 10-year Greek government debt rose for the second day, signalling investor scepticism over the Greek government’s intention to return to full private market funding early next year after the EU portion of its bailout comes to an end.

Euro group president Jeroen Dijsselbloem said following Monday's euro group meeting that the issue would be discussed next month and in December, but warned that a "sustainable exit" was essential for Greece.