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Tax and energy to dominate EU summit in Brussels EU leaders in drive against tax evasion at Brussels summit
(about 14 hours later)
EU leaders are gathering in Brussels for a summit to tackle tax evasion and improve Europe's energy market. Austria has joined its EU partners in calling for a crackdown on tax evasion, despite the country's banking secrecy.
Austrian Chancellor Werner Faymann said Europe must do more than exchange information about bank accounts.
European leaders are discussing how to prevent tax evasion by multinational companies and rich executives.
As they arrived for the talks in Brussels several leaders stressed the need for tax fairness, saying big earners must not get off lightly.
Some multinationals have taken advantage of a favourable tax regime in the Netherlands, and Dutch Prime Minister Mark Rutte said tax changes must be tackled at a global level. He said he would veto any proposals that were not in his country's interests.
The need for global co-ordination was also underlined by UK Prime Minister David Cameron, who has made tax evasion a key issue to tackle at a G8 summit of industrialised nations next month in Northern Ireland.
After sharp divisions over the EU budget there may be more consensus on these issues, seen as vital in restoring Europe's competitiveness.After sharp divisions over the EU budget there may be more consensus on these issues, seen as vital in restoring Europe's competitiveness.
Huge losses
Tax evasion costs EU states 1tn euros ($1.3tn; £0.85tn) a year - more than was spent on healthcare in 2008.Tax evasion costs EU states 1tn euros ($1.3tn; £0.85tn) a year - more than was spent on healthcare in 2008.
A European Parliament resolution calls on the EU to halve that figure by 2020, by curbing tax loopholes and havens. A European Parliament resolution on Tuesday called on the EU to halve that figure by 2020, by curbing tax loopholes and havens.
The lead author of that resolution, Slovenian socialist MEP Mojca Kleva Kekus, called the current scope for cross-border tax fraud "scandalous". The MEPs called for a joint EU blacklist of tax havens. Mr Cameron has urged low-tax British overseas territories to sign up to international tax treaties.
"Unilateral national measures will not suffice to defeat it," she told MEPs on Tuesday, in a major debate on tax evasion. The European Commission is pressing for automatic exchanges of people's earnings data between tax authorities.
The MEPs called for a joint EU blacklist of tax havens. Earlier, UK Prime Minister David Cameron had urged low-tax British overseas territories to sign up to international tax treaties. Action against "aggressive tax planning" is also on the agenda - that is, the complex yet legal accounting tricks used by some multinational companies to minimise their tax payments.
The European Commission is also pressing for automatic exchanges of people's earnings data between tax authorities. Commission President Jose Manuel Barroso says the EU should aim to introduce such exchanges on 1 January 2015. Some experts argue that business tax planning also reduces the revenue that developing country governments can collect, for example by shifting declared profits to countries where they are lightly taxed.
Next month the G8 industrialised countries will discuss strengthening global action against tax evasion and avoidance, so this one-day Brussels summit is aimed at establishing a joint EU position. The BBC's economics correspondent Andrew Walker says politicians are keen to show voters that tax systems are fair, after a wave of unpopular budget cuts aimed at reducing deficits.
Energy co-operationEnergy co-operation
The other main theme is energy policy - especially the need to improve Europe's energy infrastructure, develop renewables such as solar and wind power and remove barriers to competition. Much of Eastern Europe relies on Russia for gas - and in the past pricing disputes have led to supply shortages in mid-winter. The other main theme at the Brussels talks is energy policy - especially the need to improve Europe's energy infrastructure, develop renewables such as solar and wind power and remove barriers to competition. Much of Eastern Europe relies on Russia for gas - and in the past pricing disputes have led to supply shortages in mid-winter.
The Commission is urging EU governments to enact energy legislation that was agreed in 2011, warning that on current trends imports of gas will rise to 80% of the gas consumed in the EU by 2035.The Commission is urging EU governments to enact energy legislation that was agreed in 2011, warning that on current trends imports of gas will rise to 80% of the gas consumed in the EU by 2035.
The EU already imports 406bn euros' worth of oil, gas and coal annually - 3.2% of total EU economic output (GDP).The EU already imports 406bn euros' worth of oil, gas and coal annually - 3.2% of total EU economic output (GDP).
The fragmentation of Europe's energy market makes it difficult to woo long-term investors willing to commit to multi-billion-euro infrastructure projects. The energy mix varies greatly across Europe, from nuclear-dominated France to coal-dependent Poland.The fragmentation of Europe's energy market makes it difficult to woo long-term investors willing to commit to multi-billion-euro infrastructure projects. The energy mix varies greatly across Europe, from nuclear-dominated France to coal-dependent Poland.
But a key goal is to connect Europe's isolated "energy islands" - former Soviet bloc countries like Estonia and Bulgaria - to European grids and storage facilities.But a key goal is to connect Europe's isolated "energy islands" - former Soviet bloc countries like Estonia and Bulgaria - to European grids and storage facilities.
The distortions in Europe's energy market mean that Bulgarians - the EU's poorest citizens - pay more for their electricity than consumers in the UK or Germany.The distortions in Europe's energy market mean that Bulgarians - the EU's poorest citizens - pay more for their electricity than consumers in the UK or Germany.
In the global economy the energy blockages threaten to put Europe at a serious disadvantage. The gas price index for EU households rose by 45% in 2005-12, compared with 3% in the US, while the figures for electricity were 22% and 8% respectively, the Commission says.In the global economy the energy blockages threaten to put Europe at a serious disadvantage. The gas price index for EU households rose by 45% in 2005-12, compared with 3% in the US, while the figures for electricity were 22% and 8% respectively, the Commission says.
Transparency pushTransparency push
As host of the G8, Mr Cameron has put the tax issue high on the agenda.
The EU has already agreed to strengthen savings tax agreements with European countries widely regarded as tax havens - Switzerland, Liechtenstein, Monaco, Andorra and San Marino.
EU members Austria and Luxembourg are also low-tax jurisdictions famous for banking secrecy. They are under pressure to join the tax transparency drive, and both countries signalled a willingness on Tuesday to exchange information on foreign depositors.
In his summit invitation letter, European Council President Herman Van Rompuy said progress on tax collection and affordable energy was essential to make budget austerity more acceptable to voters.In his summit invitation letter, European Council President Herman Van Rompuy said progress on tax collection and affordable energy was essential to make budget austerity more acceptable to voters.
The EU has already agreed to strengthen savings tax agreements with European countries widely regarded as tax havens - Switzerland, Liechtenstein, Monaco, Andorra and San Marino.
There has been widespread anger from ordinary taxpayers over the sophisticated tax avoidance practised by some big corporations in Europe.There has been widespread anger from ordinary taxpayers over the sophisticated tax avoidance practised by some big corporations in Europe.
Google, Starbucks and Amazon are among the companies that have faced tough questioning over their tax affairs recently.Google, Starbucks and Amazon are among the companies that have faced tough questioning over their tax affairs recently.
And this week Apple came under fire in the US Congress over its low tax payments.And this week Apple came under fire in the US Congress over its low tax payments.