Finance Minister Backes Welcomes Russian Sanctions during Eurogroup, Ecofin Meetings

On Monday 14 and Tuesday 15 March 2022, Luxembourg's Minister of Finance, Yuriko Backes, took part in the meetings of the Eurogroup and the Economic and Financial Affairs Council (Ecofin) that were held in Brussels.

The Russian invasion of Ukraine and the implications for the European economy dominated the discussions during these two days of meetings.

In the Eurogroup meeting, the nineteen ministers notably discussed the coordination of the European response to the invasion in Ukraine and the measures intended to cushion the impact. Minister Backes commented: "The invasion of Ukraine will have an economic impact on all countries, at least in the short term, and the longer the war lasts, the greater the effects will be, among other things due to the increase in energy prices. Thanks to solid economic fundamentals, the Euro zone is well placed to meet the challenges arising from this situation of heightened uncertainty. Over the next few weeks, we will ensure close coordination of our fiscal policies".

At the Ecofin meeting, ministers considered European sanctions against Russia. Minister Backes stressed: "We are responding to Russia's military aggression of Ukraine with extremely severe economic and financial sanctions. Only a common European approach is effective, and it is in this context that I welcome the fourth set of sanctions that the European Union has just adopted".

The discussions of the 27 ministers during the Council did not, however, lead to agreement on the directive implementing in the EU Pillar II of the OECD agreement on international tax reform. Minister Backes stressed: "Luxembourg supported this initiative throughout the work and contributed proactively and constructively to the drafting of the text. I remain confident about the possibility of reaching an agreement soon". However, the 27 ministers managed to find an agreement on a general approach on the creation of the carbon border adjustment mechanism of the EU (CBAM); Minister Backes said: "This is a key part of the Fit for 55 package and an important step on our journey to carbon neutrality".

On the sidelines of these meetings, Minister Backes had bilateral meetings with the Finnish Deputy Prime Minister and Minister of Finance, Annika Saarikko, the Belgian Deputy Prime Minister and Minister of Finance, Vincent Van Peteghem, and the Slovenian Minister of Finance, Andrej Sircelj. These discussions mainly focused on the economic consequences of the war in Ukraine as well as the completion of the Banking Union.

Minister Backes also participated together with Belgium's Minister Vincent Van Peteghem and the Dutch State Secretary for Taxation, Marnix van Rij, in a BeNeLux conference on ways to further increase efforts to reduce VAT losses. Minister Backes noted in her speech a strengthening of joint actions in this area. She commented: "Sharing best practices between our three countries leads to more decisive and targeted action to detect fraud and secure payment of VAT".