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Guides on the EU policy on Finance.
Directive on Alternative Investment Fund Managers (AIFMs) - briefing
The European Commission has proposed a Directive on Alternative Investment Fund Managers (AIFM). The proposed Directive forms part of the European Commission's response to the financial crisis, as set out in the Communication on Driving European Recovery. It aims to create a comprehensive and effective regulatory and supervisory framework for AIFM in the European Union. AIFM, which include the managers of hedge funds and private equity funds, managed around EUR 2 trillion in assets at the end of 2008. This is the first attempt in any jurisdiction to create a comprehensive framework for the direct regulation and supervision in the alternative fund industry. The proposal now passes to the European Parliament and Council for consideration.
E-money and cross-border payments - briefing
The European Parliament on 24 April adopted two legislative proposals revising the current rules governing cross-border payments and the conditions for issuing electronic money in the EU. Both legal texts will now be forwarded to the EU Council for final adoption. The new Regulation on cross-border payments will apply as from 1st November 2009, the final deadline for the transposition of the Payment Services Directive. As for the new E-Money Directive, the Member States should transpose the Directive by 2011 at the latest into national law.
EUR 866m European Investment Bank loans for cleaner cars - briefing
The European Investment Bank’s Board of Directors has approved loans to European-based car makers worth a total of EUR 866m to help design and build cleaner cars with lower CO2 emissions.
Financial Reporting: burden reduction for micro-entities - briefing
The European Commission has put forward a new proposal which would allow EU Member States to completely abolish financial reporting obligations for the EU's smallest companies. In a deteriorating economic climate, the new rules are designed to alleviate the regulatory burden on micro entities. The aggregate administrative burden reduction potential is estimated at around EUR 6.3 billion. The proposal, which was flagged in the European Economic Recovery Plan in November 2008, now passes to the European Parliament and the Council of Ministers for consideration.
EU support to fight the crisis in the automotive sector
The European automotive sector, with 12 million jobs depending on this strategic industry, has been hit particularly hard by the current economic crisis with new registrations down by 20 per cent and gloomy expectations for 2009. Due to its close links to other sectors and the wide spread of supply industry and vehicle trade, the negative economic effects reaches out to millions of employees in all EU Member States. In today's communication, the European Commission defends a proactive stance to support industry in their efforts to withstand the crisis, soften negative effects and ensure long-term competitiveness. Building on the European Economic Recovery Plan of 2008, it sets various measures to improve access to credit, to clarify the rules for granting state aid in the particular circumstances, to boost the demand for new vehicles through coordinated national action, to minimise social costs and retain the skilled workforce and to defend fair competition in open markets. The Commission suggests a new partnership with industry, trade unions and EU Member States in the context of the CARS 21 process to accompany the common crisis response.
Review of the VAT invoicing rules - briefing
The European Commission adopted a proposal on 28 January to change the VAT Directive 2006/112/EC in respect to the invoicing rules, based on a Communication on the technological developments in the field of electronic invoicing. The aim of the proposal is to increase the use of electronic invoicing, reduce burdens on business, support small and medium sized enterprises (SMEs) and help EU Member States to tackle fraud. The proposal simplifies, modernises and harmonises the VAT invoicing rules. In particular, it eliminates the current barriers to e-invoicing in the VAT Directive by treating paper and electronic invoices equally. The proposal is a key element of the Commission's Action Programme to reduce burdens on business by 25% by 2012, and is part of the Commission's strategy to combat VAT fraud more efficiently.
The EU and Germany's Volkswagen law - briefing
The European Commission decided on 27 November to ask Germany formally to modify the 1960 law privatising Volkswagen (VW law) following a ruling of 23 October 2007 by the European Court of Justice. The Court found that three provisions of the VW law attribute unjustified special rights to German public authorities (the Land of Lower Saxony and potentially also the Federal Government) and that by maintaining them in force, Germany has failed to fulfil its obligations under the EC Treaty rules on the free movement of capital (Article 56). The request for compliance with the Court ruling takes the form of a ‘reasoned opinion’, the second stage of the infringement procedure under Article 228 of the EC Treaty related to compliance with Court of Justice rulings. In the absence of a satisfactory reply from Germany within two months of receiving the reasoned opinion, the Commission may decide to refer the matter to the European Court of Justice.
European Economic Recovery Plan - briefing
The European Commission presented on 26 November a comprehensive plan to drive Europe's recovery from the current economic crisis. The Recovery Plan is based on two mutually reinforcing main elements. Firstly, short-term measures to boost demand, save jobs and help restore confidence. Secondly, "smart investment" to yield higher growth and sustainable prosperity in the longer-term. The Plan calls for a timely, targeted and temporary fiscal stimulus of around EUR 200 billion or 1.5% of EU GDP, within both national budgets (around EUR 170 billion, 1.2% of GDP) and EU and European Investment Bank budgets (around EUR 30 billion, 0.3% of GDP). Every EU Member State is called upon to take major measures good for its own citizens and good for the rest of Europe. The Recovery Plan includes extensive action at national and EU level to help households and industry and concentrate support on the most vulnerable. It puts forward concrete steps to promote entrepreneurship, research and innovation, including in the car and construction industries. The Recovery Plan aims to boost efforts to tackle climate change while creating much-needed jobs at the same time, through for example strategic investment in energy efficient buildings and technologies.
EU credit rating agencies proposal - briefing
The European Commission has put forward a proposal for a Regulation on credit rating agencies. This proposal is part of a package of proposals to deal with the financial crisis and adds to Commission's proposals on Solvency II, Capital Requirements Directive, Deposit Guarantee Schemes and accounting. The new rules are designed to ensure high quality credit ratings which are not tainted by the conflicts of interest which are inherent to the ratings business.
European trade strengths in a changing global economy - briefing
A report published on 27 October 2008 by the European Commission has assessed the competitiveness of the European Union in the global economy at the end of a decade of rapid economic change. Since the mid-1990s, there has been a major redistribution of market share between emerging and developed countries and among developed countries themselves. In this highly competitive environment, the EU has broadly maintained its world market share, while the US and Japan have lost ground. The EU remains the world's biggest exporter of manufactured goods, and dominates markets for high-quality products. The report warns, however, that the EU needs to focus on investment in its high-technology manufacturing and continue to improve its market share in the fast growing economies of Asia. The report reinforces the economic arguments behind the launch of the European Commission's Global Europe trade policy framework in 2006.
Cross-border euro payments - briefing
The European Commission has put forward a proposal modifying the provisions and extending the scope of the 2001 Regulation on cross-border euro payments, under which cross-border bank transfers in euro within the EU cost the same as domestic transfers. The proposal comes in response to the rapid evolution of the EU payments market. It aims at extending the principle of equality of charges to direct debit payments. It also contains some provisions enhancing the protection of consumer interests and rights and alleviating the statistical reporting burden.
Europe's response to the Financial Crisis
The immediate priorities for the European Union have been to restore confidence and to protect ordinary citizens. Europe has achieved an unprecedented level of coordination in dealing with this unprecedented crisis.
Electronic money proposal - briefing
The European Commission has put forward a proposal revising the current rules governing the conditions for issuing electronic money in the EU. The proposal follows extensive consultation which showed that the current rules, dating from 2000, have hindered the take-up of the electronic money market, hampering technological innovation. The revised rules will facilitate market entrance for new providers and contribute to develop an industry whose expected volume could reach up to EUR 10 billion by 2012.
Excise duty on tobacco products - guide
The European Commission presented on 16 July a Report and a proposal for a Directive to amend the current EU excise duty legislation on tobacco. The draft EU Directive foresees a gradual increase in the EU minimum taxation levels on cigarettes and fine cut tobacco up to 2014. It also updates the definitions of different types of tobacco products so as to remove loopholes which allow certain cigarettes or fine cut tobacco to be presented as cigars, cigarillos or pipe tobacco and therefore benefiting from a lower tax rate. Today's proposal will narrow differences between EU Member States' tobacco taxation levels and so help tackle intra-EU tobacco smuggling. It would also make the taxation rules more transparent, thereby creating a level playing field for manufacturers and giving flexibility to Member States to set minimum taxes. It also aims to contribute to reducing tobacco consumption by 10 per cent within the next 5 years.
Communication on VAT reduced rates - guide
The European Commission made a proposal on 7 July 2008 to change the VAT Directive 2006/112/EC so as to provide EU Member States with the flexibility to apply reduced VAT rates for some specific services on a permanent basis. The Commission proposal covers areas where there is sufficient evidence that reduced rates do not create problems for the proper functioning of the Internal Market. The sectors concerned are mainly so called labour-intensive services and locally supplied services, including restaurant services. The proposal is also part of the small business act as SMEs dominate the sectors concerned. The proposal does not alter the principle that the application of reduced rates is optional for Member States.
How VAT works in the European Union
Value Added Tax, or VAT, in the European Union is a general, broadly based consumption tax assessed on the value added to goods and services. It applies more or less to all goods and services that are bought and sold for use or consumption in the Community. Thus, goods which are sold for export or services which are sold to customers abroad are normally not subject to VAT. Conversely imports are taxed to keep the system fair for EU producers so that they can compete on equal terms on the European market with suppliers situated outside the Union.
Financial inclusion - guide
The study “Financial Services Provision and Prevention of Financial Exclusion”, prepared for the European Commission, aims at identifying and analysing the most effective policy measures to prevent financial exclusion of people facing poverty or social exclusion.
Notice on state aid in the form of Guarantees - guide
The European Commission on 20 May 2008 adopted a new Notice on state aid in the form of guarantees. The text sets out clear and transparent methodologies to calculate the aid element in a guarantee and provides simplified rules for SMEs, including predefined safe-harbour premiums and single premium rates for low-amount guarantees. The new Notice was foreseen in the State Aid Action Plan as part of the Commission's efforts to clarify and simplify the state aid rules.
Commission issues Recommendation to strengthen confidence in statutory audit
The European Commission on 13 May 2008 issued a Recommendation on "external quality assurance for statutory auditors and audit firms auditing public interest entities". It provides guidance to EU Member States for establishing an independent and effective system of inspections on the basis of the Directive on Statutory Audit. In essence, this Recommendation gives more responsibilities to the public oversight bodies, strengthens the independence of inspection teams and enhances transparency on the results of inspections of individual audit firms.
Commission investigation into UK restructuring aid package for Northern Rock - guide
The European Commission on 2 April 2008 launched an in-depth investigation under the EC Treaty’s rules on state aid into the UK authorities' package of measures to support the restructuring of Northern Rock, the UK mortgage bank. The Commission received the notification of these measures on 17th March 2008. The opening of an in-depth investigation gives interested parties the possibility to comment on the proposed measures but it does not prejudge the outcome.