US treasury secretary Lew to meet commissioner Vestager

US treasury secretary Jack Lew arrives in Brussels on Wednesday for talks with EU competition commissioner Margrethe Vestager amid expectations that the European Commission could rule on its long-standing Apple investigation as early as this month.

The US treasury secretary will meet with the Danish commissioner, as well as outgoing British commissioner Jonathan Hill and European Commission vice-president Valdis Dombrovskis at European Commission headquarters in Brussels.

Meetings

The meetings take place against the background of unprecedented tensions between Washington and Brussels over the commission’s clamp-down on the tax practices of US multinationals, including computer giant Apple which has been the subject of a three-year probe by the EU’s anti-trust arm.

In February Mr Lew wrote to European Commission president Jean-Claude Juncker, criticising the European Commission for unfairly targeting US companies. The probes raised “serious concerns about fundamental fairness and the finality of tax rulings throughout the entire European Union, “ he wrote. EU Competition Commissioner Margrethe Vestager has denied accusations of bias against US companies.

In addition to the long-running Apple case, the Commission's powerful anti-trust arm is also said to be preparing additional anti-trust charges against Google, accusing the computer giant of abusing its dominance of the search engine market to prioritise its own services.

Mr Juncker, who is in Beijing for an EU-China summit, will not be attendance at the meeting.

Ruling

Minister for Finance Michael Noonan said on Monday that there had been no update on the Apple investigation, which the Irish government has said it will fight in the European Court of Justice in the event of an adverse ruling for Ireland.

The finance minister was in Brussels for two-days of finance ministers’ meetings, the first since the British vote to leave the European Union on June 23rd.

On Tuesday, ministers at the ecofin meeting endorsed ruled that Spain and Portugal had failed to meet European Commission budget targets prescribing budget deficits of 3 per cent of GDP last year.

They found that the fiscal effort made by the two countries fell “significantly short of what was recommended.” The move could pave the way for fines to be imposed on both countries. Spain and Portugal now have 10 days in which to make their case to the Commission.

But the European Union is wary of imposing punitive measures on countries at a time when the European Union is faced with uncertainty following the Brexit vote and countries are wary about stoking euroscepticism in member states. Minister for Finance Michael Noonan was one of a number of finance ministers who raised concerns about imposing harsh sanctions, though he did support the move to formally take the decision that both were in breach of deficit targets.

Signal

French finance minister Michel Sapin also said that the commission should "take into account the particular situation of 2015 and the considerable efforts that the Portuguese and Spanish people" have made over the past few years.

“A bad signal would be that we don’t respect rules any more in the euro area; another bad signal would be to punish for the pleasure of punishing,” he said.

As ministers signed off on new anti-tax avoidance rules agreed last month, Slovakia's finance minister Peter Kazimir underlined his country's commitment to tackling corporate tax avoidance during the country's six-month presidency of the Council of the European Union.

“The presidency plans to make progress on action to fight tax evasion and tax avoidance in the coming months”, he said. “No need to say that tens and hundreds of millions of euros lost to tax fraud or avoidance could be invested into our economies and we need to tackle this disease by all means.”

Also on Tuesday the EU signed a tax agreement with Monaco aimed at improving tax compliance by individuals. Under the new agreement, each tax administration will have more information on the financial accounts of each other’s residents