On 1 July 2020, Germany took over the Presidency of the Council of the European Union for six months. Our website www.eu2020finance.de provides an overview of the Finance Ministry’s policy priorities during the presidency, along with key dates and events. We also provide easy-to-understand explanations of fiscal policy terms.
On 16 October 2019, Minister of Finance Olaf Scholz participated in the Franco-German Ministerial Council in Toulouse, France. The French and German ministries of finance and economic affairs agreed on a new roadmap on economic and financial issues, with a special focus on exploring bilateral cooperation and developing common positions at the EU level.
The Agreement on the Withdrawal of the United Kingdom from the European Union, which sets out the terms of Brexit, is currently in the ratification phase and is expected to enter into force on 1 February 2020. Initially nothing will change for citizens and businesses, because EU law will generally continue to apply in and to the UK during a transition period until the end of 2020. However, the UK will no longer have a say within the EU’s institutions. The UK will also remain part of the European single market and customs union during this period.
In different European newspapers – Le Figaro, La Repubblica, El Pais, Ta Nea, Expresso, Gazeta Wyborcza, Le Soir and Die Welt – Federal Minister of Finance Olaf Scholz outlined the main challenges and most important tasks of Germany’s Presidency of the Council of the European Union.
In the event of a no-deal Brexit, the UK will be treated as a third country, which will have a significant impact on the movement of goods between the UK and the EU. Although the resulting re-introduction of customs duties, formalities and controls would add significant procedural hurdles to trade with the UK, the German government and the German customs administration are carefully preparing for this scenario.
The 50th Franco-German financial and economic council was held in Paris on 19 September 2019. German Finance Minister Olaf Scholz, German Economic Affairs Minister Peter Altmaier and their French counterpart Bruno Le Maire agreed to deliver a strategy for growth, strengthen the euro area, launch joint industry projects and protect the EU’s sovereignty over trade policy. The fight against climate change is a priority for both countries.
On 27 March 2019, German finance minister Olaf Scholz met Menno Snel, State Secretary for Finance at the Dutch Ministry of Finance. In a joint statement, the two countries reaffirmed their commitment to combating tax avoidance by agreeing and implementing the OECD and EU standards on base erosion and profit shifting (BEPS).
On 8 February 2019, German finance minister and vice-chancellor Olaf Scholz delivered a keynote speech at the London School of Economics and Political Science. He emphasised that Europe is stronger when it acts in concert and that it needs to strengthen its sovereignty as a global political actor in its own right so that it becomes impossible to play Europeans off against each other.
Germany and France have strengthened their cooperation with a new friendship treaty that was signed in the city of Aachen on 22 January 2019. One priority project on the new joint agenda is cooperation in the area of financial services and financial markets at the EU level, with the goal of working towards high regulatory standards, including in the area of sustainable finance.
The European Union needs a budget that is modern and future-proof. Against the backdrop of current challenges and Brexit, the 2021-2027 multiannual financial framework needs a new focus. Negotiations are currently underway. The German Finance Ministry basically supports the European Commission’s proposals, but believes that they do not go far enough. Germany is in favour of a more far-reaching modernisation of the budget.
The August edition of the Finance Ministry’s monthly report offers an insight into current Franco-German cooperation, not only at the government level, but also at the working level of the two finance ministries. One element of this is the Franco-German Seminar. Launched in 1999, the seminar entered its 10th cycle in Berlin in May 2018.
The analysis of the European Union’s latest Ageing Report provided in the Finance Ministry’s June 2018 monthly report shows that the long-term sustainability of public finances in the EU member states continues to face major challenges as a result of demographic change. Germany is disproportionately affected by increases in age-related spending.
The heads of state and various government ministers from Germany and France convened in Meseberg on 19 June 2018, where they agreed on an extensive catalogue of European reforms. Documents relating to fiscal, budget and tax policy are presented here.
In a joint paper, German and Italian finance ministers Peter Altmaier and Pier Carlo Padoan set out their ideas for redesigning the EU budget, taking into account the existing financial possibilities. Their proposals focus on a stronger promotion of structural reforms and European public goods, from which all EU citizens can benefit.
On 16 March 2020, the Eurogroup held a discussion with non-euro area members on how to respond to the extraordinary human and economic crisis caused by the coronavirus. This discussion followed up on the video conference of 10 March 2020 between European Council members, the ECB President, the Eurogroup President and the High Representative for Foreign Affairs and Security Policy.
The Eurogroup and ECOFIN convened for their most recent meetings in Luxembourg on 13-14 June. Major progress was made on reforms to the European Stability Mechanism, which is crucial for enhancing the stability of the banking union and the common currency. European finance ministers also agreed on the main features of a future budgetary instrument for the euro area. The financing for the budgetary instrument will be decided as part of the Multiannual Financial Framework. Progress was also achieved in plans to establish a financial transaction tax: its basic contours are to be defined this year in order to start levying the tax in 2021.