European leaders will be meeting today to discuss strategic reviews of the EU’s energy policy and cooperation to fight tax evasion.
Today’s discussion on energy is mostly strategic but will lay the foundation for a more detailed discussion by EU energy ministers in June.
Malta, which is represented by Prime Minister Joseph Muscat, is particularly keen on strengthening the EU’s resolve to invest on connectivity and provide funding for projects which link isolated countries to the European network.
Malta has already benefitted from funding for its €200 million electricity interconnector with Sicily. However, feasibility studies have also been launched on the possibility to build a gas pipeline.
If viable, the pipeline would be a long term alternative to the government short term plans to build a Liquefied Natural Gas terminal that would supply the new, privately-financed gas-fired power station is being planned at Delimara.
The draft conclusions on tax evasion are also short on concrete measures, which would have to be developed in the coming months.
However, the EU leaders are expected to urge the European Commission to kick start immediate discussions with a number of third countries, such as Switzerland, Liechtenstein, Andorra and San Marino on a revision of existing agreements that facilitate information sharing between banks of these countries outside the EU and tax authorities of countries within the Union.
The move is proving particularly controversial in Switzerland, which is jealous of its banking secrecy rules which are believed to be responsible for the harbouring of substantial undeclared funds belonging to EU citizens.
The Swiss Parliament is split on whether to accept increased cooperation in this area, with some MPs arguing that this could damage the country’s thriving banking system.
But Switzerland is by no means the only objector to increased cooperation in this area. In fact, among the members, Austria and Luxembourg, which both have strong banking institutions that attract the savings from neighbouring European countries, have also been reticent to increase data sharing between members. Without their consent, no progress can be made as this is an area of unanimity.
Malta's position is to support information sharing, as long as there is a level playing field. However, the government has consistently argued that tax evasion is a global issue which needs international cooperation to avoid reducing the attractiveness of EU financial institutions.
It is estimated that the European Union loses some one trillion euros to tax evasion each year, roughly double the annual deficit of all member states put together.
mmicallef@timesofmalta.com