Green light for Ecofin to further investigate the possibility of introducing a European tax on the extra profits of energy companies. This was announced by Irish Finance Minister Simon Harris, president of the EU Council. “It was agreed that the issue merits further investigation and work at a technical level,” he said, pointing out that ministers had instructed their officials to continue examining this possibility, in parallel with the European Commission's plan to convene a working group on the topic.
"From the Commission's point of view, we believe that Member States are best placed to take measures on the taxation of extra profits of energy companies," said European Commissioner for Economy Valdis Dombrovskis, responding to a question on whether a European legislative proposal would be presented and when it would take place. “We actually had a discussion,” he explained. “At the same time, we agreed to set up a working group to address this issue, share best practices and, in a way, help and assist member states in this work.”
Ecofin in Luxembourg also found political agreement on the Market Supervision package, which includes measures to deepen the integration of EU capital markets aiming to support competitiveness.
“The Council has reached agreement on the package. The legal text will now be finalized to reflect the agreement reached and will then be formally approved at a future Council meeting,” Simon Harris said. "I hope that, in time, the decision taken today can be considered a fundamental step for the European Union and for our economy."
The package essentially provides for stronger European supervision of the financial markets, but limited to the largest operators and the most relevant cross-border activities, without removing the authority of the national authorities. In the Commission's intentions it is one of the pillars of the European strategy to mobilize private savings and encourage investment in the economy, overcoming market fragmentation.
At the center of the reform is the strengthening of ESMA, the European financial market supervisory authority, which will assume direct control of some of the main market infrastructures and major cross-border operators, currently subject mainly to national authorities. However, compared to the Commission's original proposal, the Council has reduced the scope of European supervision, one of the most controversial points of the negotiations. For trading platforms, including stock exchanges and other organized markets, the number of operators destined to come under the direct supervision of ESMA drops, according to what filters in Luxembourg, from 12 to 8. The selection will take place on the basis of criteria linked to market share and cross-border activity.
The Commission will have to review the established thresholds after two years to verify whether they are adequate. Euronext, the group which also includes Borsa Italiana, should fall under the direct supervision of ESMA, because it operates through various European national markets, while the expectation is that, for example, Deutsche Börse will remain outside. A significant limitation with respect to the Commission's proposal also concerns companies that provide services on cryptocurrencies: Brussels proposed to transfer supervision of all these operators to ESMA, the Council decided to reserve it for those considered most important (there would be around ten).
Another delicate issue in the negotiations was the governance of ESMA, who will have to make the decisions and how much power the national authorities will retain. The agreement provides for the creation of a new executive committee, responsible for decisions on operators subject to direct European supervision, while the council bringing together the national authorities will retain competences on strategies, budgets and coordination of supervision. To overcome the last resistance, the Irish presidency also overnight changed the rules on the participation of national authorities in coordinated supervision groups, introduced precise deadlines for requests to discuss decisions and revised the financing of ESMA. For activities not financed by contributions from directly supervised operators, the share borne by the national authorities will decrease from 60% to 40%, while that of the European budget will increase from 40% to 60%. The agreement was reached with the support of 25 countries and the abstention of Belgium.
