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EU leaders in drive against tax evasion at Brussels summit EU leaders in drive against tax evasion at Brussels summit
(about 2 hours later)
Austria has joined its EU partners in calling for a crackdown on tax evasion, despite the country's banking secrecy. EU leaders say they are committed to tackling tax evasion and will push for global action to curb banking secrecy.
Austrian Chancellor Werner Faymann said Europe must do more than exchange information about bank accounts. The president of the European Council, Herman Van Rompuy, said there was a "strong political will" in Europe to make tax systems fairer.
European leaders are discussing how to prevent tax evasion by multinational companies and rich executives. He said the EU would draft tougher rules this year on banking transparency. He was speaking after summit talks in Brussels.
As they arrived for the talks in Brussels several leaders stressed the need for tax fairness, saying big earners must not get off lightly. A key goal is to prevent multinational firms exploiting legal loopholes.
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. There is widespread public anger that some big corporations have minimised their tax payments at a time of economic hardship.
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. Tax evasion and avoidance cost EU states 1tn euros ($1.3tn; £0.85tn) a year - more than was spent on healthcare in 2008.
Huge losses The EU is now promising action against "aggressive tax planning" - that is, the complex yet legal accounting tricks used by some companies to minimise their tax payments.
Tax evasion costs EU states 1tn euros ($1.3tn; £0.85tn) a year - more than was spent on healthcare in 2008. EU leaders also want global standards on exchanging bank account data. The issue will be high on the agenda of a summit of the G8 industrialised nations in Northern Ireland next month.
A European Parliament resolution on Tuesday called on the EU to halve that figure by 2020, by curbing tax loopholes and havens. 'Real breakthrough'
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. Mr Van Rompuy said the economic crisis had injected new momentum into the debate on fair taxation. But he insisted that the EU was not seeking tax harmonisation across Europe.
"It's a real breakthrough... I am really convinced there is a strong political will by leaders not just on the European level, but on the global level, to tackle tax fraud," he told a news conference.
Germany's Chancellor Angela Merkel said that EU members Austria and Luxembourg - famous for their banking secrecy - agreed on the need for tax authorities to exchange information on private income. But "they attach great importance to also holding negotiations with third countries", she added.
Switzerland, outside the EU, is a major competitor in the market for rich bank clients. Austria and Luxembourg want to ensure that Switzerland and other low-tax jurisdictions in Europe, such as Monaco and Liechtenstein, do not have an unfair advantage.
Austrian Chancellor Werner Faymann on Wednesday joined the call for a crackdown on tax evasion.
A European Parliament resolution on tax evasion on Tuesday urged the EU to halve the 1tn-euro annual losses by 2020, by curbing tax loopholes and havens.
The MEPs also called for a joint EU blacklist of tax havens.
The European Commission is pressing for automatic exchanges of people's earnings data between tax authorities.The European Commission is pressing for automatic exchanges of people's earnings data between tax authorities.
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.
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.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.
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.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.
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.
Energy co-operationEnergy co-operation
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 other main theme at the Brussels talks was 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 push
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.
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.