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Commission recommends path to greener tax policies

Fixed in its original orientation towards economic growth, the Commission called on member states to promote greener tax policies through its European Semester cycle of economic policy coordination: “Environmental taxes remain underdeveloped in many Member States and their revenues in percentage of GDP declined during the period 1999-2008, despite efforts to move to a greener society. Revenues have however increased in 2009 2010 and 2011. There is potential to raise revenue through tax increases as well as through reducing tax expenditure in environmental taxation. 

Generally, environmentally-friendly taxation would also greatly benefit from the adoption by Member States of the revised Energy Taxation Directive (ETD), which aims to restructure the way in which energy is taxed to support the objective of moving to a low-carbon and energy-efficient economy, and to avoid problems for the Internal Market.

 

Specifically, in its recommendation on France, the Commission notes that “[i]n spite of some progress in the area of environmental taxation (e.g. with the gradual introduction of a carbon tax or “contribution climat énergie”), the share of environmental taxation in GDP continues to remain low. In particular, excise duties in France are not indexed with inflation and some important environmentally-harmful subsidies such as the preferential rate of excise duty for diesel remain.” In the case of Italy, “[t]here is thus scope to further shift the tax burden towards consumption, property and the environment, in strict compliance with the budgetary targets”.

Overall, despite a modest growth prediction, the European Commission communicated to the European Parliament, the Council, the ECB and the Eurogroup a rather bleak picture of imbalances (Ireland, Spain, Slovenia, Germany and Hungary) and/or excessive imbalances (Croatia, Bulgaria, France, Italy and Portugal). As stated in the Commission’s press release (bold in the original): “[o]f the 16 countries identified in November as experiencing macroeconomic imbalances, the Commission stepped up the procedure for three countries: France (stage 5), Germany (stage 3) and Bulgaria (stage 5). For two countries, the Commission opened the Macroeconomic Imbalance Procedure (MIP): Portugal and Romania; for Slovenia, the Commission deescalates the procedure. The other 10 countries will see no change in their status (See Annex).”

Read more: European Semester 2015

 

Last modified onMonday, 02 March 2015 10:24
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