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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

‘Populism always ends in catastrophe’: How Spain has reacted to Italy’s vote

The likely victory of Giorgia Meloni’s far-right Brothers of Italy party in Sunday’s elections has not gone unnoticed in Spain, where voices from across the political spectrum have either lauded or criticised the results.  

'Populism always ends in catastrophe': How Spain has reacted to Italy's vote

Giorgia Meloni’s Brothers of Italy party, which has neo-fascist roots, looks set to form Italy’s most far-right government since dictator Benito Mussolini.

Meloni came top in Italian elections on Sunday, the first exit polls suggested, putting her eurosceptic populists on course to take power at the heart of Europe.

The party has never held office but as of Monday morning, with the count still in progress, it looked set to claim over 44 percent of the vote, making it the clear victor.

It hasn’t taken long for reactions to the Italian elections to pour in from Spain, a country with close cultural and linguistic similarities to Italy.

Spain’s Socialist Prime Minister Pedro Sánchez, who was diagnosed with Covid-19 on Sunday, has not commented publicly yet on Meloni’s likely victory, leaving it instead to Spanish Foreign Minister José Manuel Albares to give his opinions on Italy’s general election results. 

“These are uncertain times and at times like this, populist movements always grow, but it always ends in the same way – in catastrophe – because they offer simple short-term answers to problems which are very complex,” Albares told reporters at a briefing.

Asked if the far-right’s victory in Italy could be “extrapolated” to Spain, the Foreign Minister ruled this out as a possibility. He acknowledged that the results were completely legitimate but added that Meloni’s governance model was closer to Putin’s than to the EU’s. 

“This (Meloni’s) is an authoritarian model that is contrary to the pillars of European construction, which is the basis of our prosperity.”

On the other hand, Ione Belarra, head of far-left party Unidas Podemos, which forms part of Spain’s governing coalition, said that: “The victory of the Italian far right showcases the normalisation of hate speech and the lack of courageous policies that protect the social majority. Spain is not free from experiencing something like this. Now is the time to open up urgent and ambitious debates.”

The reaction has been completely the opposite from Spain’s very own far-right party: Vox.

“Tonight, millions of Europeans have their hopes pinned on Italy,” tweeted Vox leader Santiago Abascal along with pictures of Meloni and him.

“Giorgia Meloni has shown the way forward for a Europe of proud, free and sovereign nations, capable of cooperating for the security and prosperity of all. Avanti Fratelli d’Italia.”

Madrid’s regional president Isabel Díaz Ayuso, a member of Spain’s right-wing Popular Party (PP), criticised the Spanish Socialists’ reaction to the Italian vote by saying “It’s only democracy when those who win are the ones they support”, adding that they should wait to see “in detail” what Meloni’s government has to offer. 

Madrid’s divisive leader said the Italian election vote shows how the strategy of “joining Socialists with the far left is a disaster that will lead to their demise”. 

On the other hand, Alberto Núñez Feijóo, PP party leader and presidential candidate for Spain’s 2023 general elections, took a more cautious approach, arguing that it was “not the result we were most in favour of”, whilst stating that Italian voters “had clearly manifested their position” and that the new Italian government should “bring stability” not only to Italy but to the whole of the EU. 

READ ALSO: Who is Giorgia Meloni, Italy’s likely next prime minister?

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