EU finance ministers seek ways to fight tax evasion

VILNIUS/Lithuania - The Associated Press

Germany Finance Minister Wolfgang Schaeuble (R) and the President of the Deutsche Bundesbank Jens Weidmann speak at a meeting in Vilnius.

European Union finance ministers discussed ways to strengthen the bloc’s fight against tax fraud on Sept. 14 and sought to downplay concerns over disagreements on crucial banking sector reforms.

EU officials say tax fraud and firms’ aggressive cross-border tax avoidance schemes cost the 28-nation bloc’s governments an estimated 1 trillion euros ($1.3 trillion) a year, which could provide precious new revenues at a time of sluggish growth and belt-tightening across Europe.

The finance ministers also discussed the issue with OECD chief Angel Gurria, following up on plans to increase taxation of multinational companies announced earlier this month at a meeting of the world’s 20 leading economies.

However, the ministers’ second day of talks was overshadowed by a rift over the completion of the bloc’s planned banking union that emerged on Sept. 13. “So far there have been cannon shots going back and forth, but there hasn’t actually been a debate on how it could be solved,” Dutch Finance Minister Jeroen Dijsselbloem said.

Dijsselbloem, who also chairs the meetings of finance ministers from the 17-nation eurozone, said there will be “interesting debates over the next couple of months” but he voiced confidence that a compromise will be reached by December.

Failure to agree could delay the project by more than a year because of upcoming elections to the European Parliament in May and the departure next fall of the current EU Commission, the bloc’s executive arm.

The euro countries have already agreed to set up a centralized bank oversight to be anchored with the ECB due to take effect next year.