Rules enforcement in the EU: “Conditionality” to the rescue? Bertelsmann Stiftung Policy Paper 28.05.2019

• Since the 1990s, the EU has used its budget not just to implement policies, but also to influence member state behaviour. Payments to governments and regions can be increased as an incentive or suspended as a punishment. In EU circles, this is called “budget conditionality”. It is a little known but common instrument. Today, budget conditionality covers such diverse areas as fiscal policy rules, economic reforms, human rights standards and environmental protection. • Recent years have highlighted the EU's weak position vis-à-vis member states that refuse to implement EU rules and decisions, for example on fiscal policy, refugees and democratic standards. Budget conditionality is now being discussed as one way to remedy this problem. • In preparation of the next long-term budget (MFF) starting in 2021, the European Commission has published proposals to strengthen existing conditionality mechanisms and to introduce a new procedure aimed at suspending EU payments to those countries that do not respect the rule of law. • We review the proposed instruments and evaluate whether they are likely to help the EU achieve its goals. We argue that, in principle, the EU budget can be useful as a carrot or stick to influence member state behaviour but it cannot fully make up for a lack of political will

Taxation to the rescue? A tax reform to support EU economic recovery post-COVID-19. Bertelsmann Stiftung Policy Brief June 2020.

When the Corona crisis struck and its economic damage became obvious, costly rescue packages were quickly put together across the EU. While these measures are absolutely necessary, they certainly put a strain on public budgets. This burden is further aggravated as tax revenues drop during an economic downward spiral, with struggling companies, a deteriorating labour market and falling demand. Thus, a European tax reform to support the economic recovery through increasing fiscal revenues without putting any extra burden on companies or households is a must

Users, Data, Networks A Proposal for Taxing the Digital Economy in the European Single Market. Bertelsmann Stiftung Policy Paper 12 March 2019

Fair taxation of digital businesses will be a key issue in the forthcoming European election campaign. The debate will most likely revolve around the introduction of a new “digital tax” on companies’ turnover, as proposed by the European Commission, for example. In the short term this may be a workable solution, but it does not solve the real underlying problem: the current rules on corporate taxation in the EU are not fit for purpose when it comes to dealing with digital value creation. That is what we want to change with our proposal. To this end, we define clear criteria and principles for assessing digital value creation in company taxation, which should apply EU-wide. Our contribution thus fills a central gap even of those current proposals that do not envisage a new tax, but aim at a change in the system itself

THE MFF PROPOSAL: WHAT’S NEW, WHAT’S OLD, WHAT’S NEXT? Bertelsmann Stiftung Policy Brief 21 May 2018

On 2 May 2018, the European Commission released its proposal for the next Multiannual Financial Framework (MFF), covering the years 2021-27. In its own words, the Commission tabled ‘a new, modern long-term budget, tightly geared to the political priorities of the Union at 27’. This article analyses how much change and how much continuity the current proposal truly contains and discusses the next steps and possible negotiation dynamics

Taxation to the rescue? A tax reform to support EU economic recovery post-COVID-19

The COVID19 – crisis puts a strain on public households in the EU, not only because of necessary rescue packages, but also due to a drop of tax revenues in the face of an economic downward spiral. A European tax reform to support the economic recovery without putting an extra burden on companies s thus in strong need. One solution is to secure corporate taxes that formerly slipped through public budgets due to tax avoidance. In this Policy Brief, Pola Schneemelcher argues that the EU must now focus on the already proposed international minimum tax rate. Member states will not be able to implement it on their own; consensus at international level is necessary, but noncommittal. A legally binding solution can therefore only exist at EU level