Brussels, 5 November 2024
VAT in the digital age
The Council reached an agreement on a package of legislation on value added tax (VAT) in the digital age. The package consists of three proposals that set out to tackle VAT fraud, support businesses and promote digitalisation.
After almost two years of negotiations, the Council has reached an agreement on the VAT package. This is a cornerstone for the digital transition and a significant step in improving the competitiveness of the EU. The new rules will update our VAT systems to reflect the digitalisation of our economies, help combat VAT fraud, and ease administrative obligations for small companies and individual service providers. Today’s decision was preceded by intense discussions led by the Hungarian presidency; thus, we are grateful to all delegations for their constructive approach and hard work.
Mihály Varga, Hungarian minister for finance
Recovery and Resilience Facility
Ministers took stock of the implementation of the Recovery and Resilience Facility (RRF). To date, all RRPs have been approved, 70 payment requests have been received and more than €268 billion have been disbursed.
The Council adopted implementing decisions approving targeted amendments submitted by Czechia and the Netherlands to their modified recovery and resilience plans.
- Recovery and resilience fund: Council greenlights the Netherlands’ and Czechia’s amended plans (press release, 5 November 2024)
- A recovery plan for Europe (background information)
Russia’s aggression against Ukraine
The Council was informed about the state of play of the economic and financial impact of Russia’s aggression against Ukraine.
Ministers were informed about the economic and budgetary situation in Ukraine, including on the implementation of the Ukraine Facility and the state of progress on the implementation of the recent G7 agreement on an additional loan of $50 billion (€ 45 billion) to Ukraine to be serviced and repaid by future flows of extraordinary revenues stemming from the immobilisation of Russian sovereign assets.
- Immobilised assets: Council greenlights up to €35 billion in macro-financial assistance to Ukraine and new loan mechanism implementing G7 commitment (press release, 23 October 2024)
- G7 Leaders’ Statement on Extraordinary Revenue Acceleration (ERA) Loans
- EU solidarity with Ukraine (background information)
- EU response to Russia’s invasion of Ukraine (background information)
Annual reporting
The Council held an exchange views on the 2024 annual report of the European Fiscal Board (EFB) in the presence of the former EFB Chair, Niels Thygesen.
EU statistics
The Council approved conclusions on the progress made on the EU’s statistical priorities, while providing guidance for further work.
As a point without discussion, the Council also adopted a regulation that aims to further improve the development, production and dissemination of European statistics.
International meetings
The Council and Commission debriefed ministers on the main results of the G20 finance ministers and central bank governors meeting that took place on 23-24 October 2024 in Washington.
Climate finance
The Council published the 2023 international climate finance figures, in preparation for the United Nations Climate Change Conference of the Parties (COP29), which will take place from 11 to 22 November in Baku, Azerbaijan.
In 2023, the European Union and its 27 member states contributed €28.6 billion in climate finance from public sources and mobilised an additional amount of €7.2 billion of private finance to support developing countries to reduce their greenhouse gas emissions and adapt to the impacts of climate change.
The figures are based on the EU climate finance reporting rules laid down in the governance regulation.
- Council publishes 2023 international climate finance figures (press release, 5 November 2024)
- Financing the climate transition (background information)
- Climate change: what the EU is doing (background information)
- COP29 website
Financial services
The Presidency presented the state of play of legislative proposals in the field of financial services. Ministers were also informed of the state of play in implementing EU legislation in the field of financial services. These are recurrent items on the ECOFIN agenda.
As a point without discussion, the Council adopted two pieces of legislation that change the Solvency II directive, the EU’s main piece of legislation in the insurance area, and introduce new rules on insurance recovery and resolution (IRRD).
- Solvency II and IRRD: Council signs off new rules for the insurance sector (press release, 5 November 2024)
- Progress on legislative files in the field of financial services
- Digital finance (background information)
- Capital markets union (background information)
Macroeconomic dialogue at political level
A Macroeconomic dialogue at political level (MEDPOL) was held on 4 November, in the margins of the meeting.
The social partners exchanged views with the presidency and the two forthcoming presidencies, the Commission, the European Central Bank and the president of the Eurogroup. The meeting focussed on reviewing the current economic conditions, outlook and appropriate policy response, as well as addressing demographic changes and the impact on competitiveness.
EU-EFTA ministerial dialogue
A ministerial dialogue between the EU and EFTA (European Free Trade Association) countries took place in the margins of the meeting on 5 November.
Ministers exchanged views on how to improve competitiveness in the long term, taking on the challenges of demographics and productivity.
Preparatory documents
- List of A items, non-legislative activities
- List of A items, legislative deliberations
- Provisional list of A items, non-legislative activities
- Provisional list of A items
- Provisional agenda
- Background brief
Outcome documents
Press releases
- European Peace Facility: Council adopts an assistance measure in support of the Egyptian Armed Forces
- European Peace Facility: Council adopts an assistance measure in support of the navy of the Republic of the Congo
- Statistics: Council adopts revised regulation and approves conclusions on European statistics
- Urban wastewater: Council adopts new rules for more efficient treatment
- Council publishes 2023 international climate finance figures
- EU adopts rules to better measure the environment’s contribution to the economy
- Recovery and resilience fund: Council greenlights the Netherlands’ and Czechia’s amended plans
- Fighting cross-border crime: Council adopts EU law about transfer of proceedings
- Taxation: Council agrees on VAT in the digital age package
- Building materials: Council adopts law for clean and smart construction products
- Solvency II and IRRD: Council signs off new rules for the insurance sector
- Artificial intelligence (AI): Council approves conclusions to strengthen EU’s ambitions
- Hydrogen: Council calls for swift implementation of EU law and coordinated action for networks, industry and investors
Source – EU Council
Remarks by Executive Vice-President Dombrovskis at the ECOFIN press conference
Brussels, 5 November 2024
“Check against delivery”
Thank you minister. Good afternoon, everyone.
I would like to start by offering my sincere condolences to the people of:
Alaquàs, Albal, Aldaia, Alfafar, Algemesí, Benetússer, Catarroja, Llocnou de la Corona, Massanassa, Paiporta, Picanya, Sedaví, Utiel – and many other places in Valencia and across Spain – for the loss of lives and livelihoods caused by the catastrophic floods that began last week.
Spain’s Minister Cuerpo stayed in Madrid to deal with the emergency and was unable to join us today.
The European Commission will continue to provide all the support that it can.
Turning to today’s business:
As Minister Varga said, ECOFIN agreed to 
update the EU’s VAT rules to bring them in line with the digital age, keeping up with technological progress.
This is a significant advance in our fair taxation agenda and reflects new digital realities such as the rapid growth of e-commerce and people working on online platforms.
It will make the EU’s VAT system more business-friendly and resilient to fraud, by embracing and promoting digitalisation.
The changes agreed today will help governments to:
- recoup VAT revenues,
- strengthen the fight against VAT fraud,
- and reduce pressure on stretched public finances.
They also address VAT rules for the platform economy, setting fairer conditions for traditional providers that compete with digital platforms.
And they make life easier for businesses by simplifying their obligations, with a single EU-wide VAT registration to reduce compliance costs for businesses operating across borders.
Turning to the EU economy:, it is improving as we emerge from a series of crises.
Economic growth has been moderate so far this year.
The latest figures from Eurostat show that euro area GDP grew by 0.4% in the third quarter compared with the previous one: an increase of 0.9% compared with the same quarter of 2023.
Employment remains historically strong. Households’ real incomes continue to recover, along with demand for credit.
And it is encouraging to see that inflation is maintaining its downward path.
Annual inflation in the euro area fell to 1.7% in September from 2.2% in August. A year earlier, the rate was 4.3%.
While these supportive factors are partly offset by a legacy of higher prices, relatively weak investment and subdued business sentiment, we still expect a moderately positive expansion for the remainder of this year and for 2025.
Of course, the economic outlook remains subject to much risk and uncertainty.
This includes the war in Ukraine, tensions in the Middle East, and the outcome of this week’s US Presidential elections.
The Commission will update its forecast on November 15.
All this highlights the importance of focusing on reforms and investments that increase the EU’s growth potential by boosting competitiveness and productivity.
This is why Member States need to keep up the pace of putting their national Recovery and Resilience Plans into effect.
Overall, implementation of the Recovery and Resilience Facility is speeding up, as shown in the third annual RRF report that the Commission published last month.
This good pace needs to be maintained and, in some cases, accelerated, given the Facility’s end-2026 deadline.
We are on track to see RRF disbursements reach €300 billion by the end of the year. This is close to 50% of the RRF envelope.
To date, the Commission has disbursed 41% of the total amount of grants and loans committed under the RRF.
I would like to take this opportunity to welcome today’s endorsement of revised Recovery and Resilience Plans from Czechia and the Netherlands.
Lastly, on Ukraine, which entering a third difficult winter.
It is now fighting for its freedom not only against Russians, but also against soldiers from North Korea.
For Ukrainians, winter is being made harder by Russia’s intensified attacks on Ukrainian energy infrastructure, which are very damaging for Ukraine’s economy and public finances.
According to the IMF’s latest update, Ukraine’s financing gap could reach US $41.5 billion next year.
The bottom line is that Ukraine urgently needs more financial support to survive – and as soon as possible.
In this context, the good news is that two weeks ago, the Council adopted a financial assistance package for Ukraine.
For the first time, this makes use of revenues stemming from immobilised Russian state assets so that Russia is made to pay for the damage it has caused.
As you know, it includes an exceptional macro-financial assistance loan of €18.1 billion and a loan cooperation mechanism provided by the EU and G7 partners.
The mechanism will support Ukraine to repay loans for up to €45 billion, or $50 billion, based on specific contributions that were agreed by G7 partners at end of October.
To avoid the US imposing a high-risk premium on its own loan to Ukraine under the Extraordinary Revenues Acceleration loans initiative, all Member States should move ahead quickly with adopting the last text of the legislative package regarding changes to the EU sanctions regime.
Following the rapid approval of the European Commission’s proposal by the European Parliament and Council, the EU was able to take on a leadership role in meeting its commitment for the ERA initiative.
We are now working on a Memorandum of Understanding with Ukraine for this assistance, to be approved by Member States and the Parliament.
And we aim to take all decisions needed for the relevant financial transactions by the end of this year.
Our combined support reconfirms the unwavering commitment of the EU and G7 partners to support Ukraine in its fight for freedom. Thank you very much and I will conclude here.
Source – EU Commission