L-R: Sajid Javid, UK Chancellor of the Exchequer; Pierre Gramegna, Luxembourg's Minister of Finance; Credit: MFIN

On 20 and 21 January 2020, Luxembourg's Minister of Finance, Pierre Gramegna, participated in the meetings of the Eurogroup and Ecofin Council in Brussels.

Two subjects took centre stage during the two days of meetings, namely the European Green Deal and digital taxation.

At Luxembourg's request, the subject of taxation in the digital sector was put back on the agenda of the Ecofin Council (the first such meeting under the Croatian presidency). In fact, Finance Minister Pierre Gramegna had asked the European Commission and the Croatian Presidency for a general exchange of views between ministers on the work carried out at the OECD, prior to the meeting of the Inclusive Framework of the OECD scheduled for late January.

In his speech, Pierre Gramegna emphasised: “Against the backdrop of transatlantic tensions, it is crucial that the objective of an agreement at OECD level be maintained. A common European solution in line with the OECD approach is the only guarantee of a level playing field and of maintaining the competitiveness of European businesses”. The Minister also asked that the subject be discussed on a regular basis at Ecofin meetings; this was agreed.

Moreover, the ecological transition was the common theme of the Brussels meetings. At the Ecofin Council meeting, the Commission presented to the finance ministers the economic and financial aspects of the European Green Deal, as well as the details of the first initiative to result from it: the Sustainable Europe Investment Plan. The latter notably relies on the involvement of the private sector, thus opening the way to financing coming from investment funds, and provides for the creation of a Just Transition Mechanism of at least €100 billion to support the regions to which the transition to a sustainable economy poses the greatest challenges. The European Investment Bank (EIB), headquartered in Luxembourg, will also play a leading role in financing this transition.

During ministerial meetings, Pierre Gramegna stressed that Luxembourg fully shares the ambition sought by the European Commission through its Green Deal while recalling the importance of mobilising all the necessary funds, public and private, to finance the fight against climate change. He added that Luxembourg is prepared to contribute all its know-how thanks to the confirmed expertise of its financial centre.

Minister Gramegna also noted: “Faced with the generational challenge of climate change, only a common and multilateral approach can move Europe forward. With the European Green Deal and the new impetus for investment, Europe not only has an ambitious long-term vision, but also acquires the instruments and financial means necessary to achieve it. Luxembourg, one of the key players in green finance, is in a privileged position to actively contribute to the mobilisation of the private funds necessary to finance the transition to a sustainable economy”.

In a similar vein, the ministers had a first exchange of views on the new Annual Sustainable Growth Strategy (ASGS) proposed by the European Commission as part of the 2020 European Semester. This ambitious growth strategy, focused for the first time on the promotion of competitive sustainability, should facilitate the construction of an economy at the service of citizens and the planet. Luxembourg, like the other Member States, has confirmed its full support for the European Commission's ambitions in this context.

Finally, at the Eurogroup in inclusive format, the ministers exchanged views on the work programme for the coming months in the context of the deepening of the Economic and Monetary Union (EMU). The finalisation of the reform of the European Stability Mechanism (ESM), a key institution of economic governance in the euro zone with its headquarters in Luxembourg, the completion of the Banking Union, as well as the establishment of the budgetary instrument for convergence and competitiveness will be addressed as a priority in the coming months.

The meetings were also an opportunity for Pierre Gramegna to meet his new Austrian counterparts, Gernot Blümel, Cypriot, Konstantinos Petridis, and Finnish, Katri Kulmuni. He also met his British counterpart, Chancellor of the Exchequer, Sajid Javid, to discuss the future of relations between the European Union and the United Kingdom.

In parallel to these meetings, Pierre Gramegna also met with Alexander De Croo, Belgium's Deputy Prime Minister and Minister of Finance, and Margrethe Vestager, Executive Vice-President of the European Commission and Commissioner for Competition, to discuss the latest developments in digital taxation.