Committee on Economic and Monetary Affairs Ordinary meeting
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ECON European Parliament
Follow its sittings
Luis de Guindos
In 2025, we also concluded the assessment of the ECB's monetary policy strategy. It reaffirmed the symmetric 2% medium-term inflation target and recognized the importance of an appropriately forceful or persistent response to large sustained deviations from the inflation target in either direction. The assessment also underlined how important it is for our monetary policy deliberations to consider not only the most likely path for inflation and growth, but also the surrounding risk and uncertainty, for example, using different scenarios. The ECB remains focused on its mandate of price stability. The current economic situation is highly uncertain in light of the war in the Middle East, and energy markets remain extremely volatile.
The governing council, which continues to follow a data-dependent meeting-by-meeting approach, decided to keep interest rates unchanged at its latest meeting last week. We will monitor developments carefully to deliver on our mandate. Beyond monetary policy, 2025 was also a year of important progress in strengthening the economic and monetary union. Let me highlight three areas where we believe we made a meaningful contribution. First, the ECB continued work on the payments and market infrastructures of the future.
The ECB advanced to the next phase of the Digital Europe project. This phase focuses on technical readiness, market engagement, and the legislative process, and aims to ensure the ECB's prepared for a pilot exercise in 2027 and a potential first issuance in 2029. Work also advanced on a modern cash framework and on a new series of euro bank notes, reaffirming the ECB's commitment to cash as a safe and inclusive payment method. In parallel, the ECB continued to work on a strategy to enable a tokenized European financial ecosystem. It consists of two initiatives, APIA, which is exploring how to create the necessary architecture, and Pontens, which aims to enable the stelleman in central bank money of wholesale financial transactions based on distributed ledger technology, DLT.
This strategy supports efficiency and innovation, strengthens the EU's strategic autonomy, and creates an opportunity to design integrated market infrastructure from the ground up. This provides strong foundations for deeper financial integration in Europe. Second, a robust regulatory framework and the savings and investment union. Both are crucial for ensuring financial stability and channeling capital to productive investment, which supports the smooth transmission of monetary policy. The ACV's contributions include opinions, analytical work, policy advice, and technical input, most notably on the European Commission's proposals on the Savings and Investments Union.
Looking ahead, it will be important to remain ambitious, particularly on the market integration and supervision package, and pursue the completion of the banking union. Third, the simplification of the regulatory and reporting framework. I had the honor to participate in the governing council's high level task force on simplification, which proposed streamlining the European prudential regulatory, supervisory and reporting frameworks for banks, noting that simplification efforts should preserve the current level of resilience. This conclusion served as input to the commission's forthcoming report on the competitiveness of the banking sector. All these contributions show that the ECB is moving forward with purpose, building a strong, secure, and prosperous economy for Europe.
Allow me to conclude. Since the start of a mandate in 2018, the euro area has experienced major progress as well as very significant challenges. Through all of these, two main things have struck me. First, there is the resilience of our economic and monetary union. The euro has remained strong and attractive, as evidenced by Bulgaria joining the euro area this year and by public support for the single currency reaching record levels.
And second is the importance of the relationship between the ECB and the European Parliament, where independence is matched by accountability. I am totally confident that my successor, governor Boris Yukicz, will continue to cultivate this important relationship. You can rest assured that whatever the future may bring, the ECB will remain firmly committed to its mandate of price and financial stability, a foundation of Europe's prosperity and strength. I now look forward to your questions. Thank you very much.
Aurore Lalucq
Thank you, Mr. Vice President. Now we'll give the floor for one minute and a half to Fernando Navarrete for APP.
Fernando Navarrete Rojas
Thank you very much, Madam Chair, Vice Chair. Welcome again for the last time at this committee. And today, I'd like to express gratitude. Gratitude for the interaction all of these years. Thank you very much for your accountability.
And speaking as an individual here, allow me to thank you for the work that you've done on the governing body all of these years. Because as you've talked about, the European economy is facing major challenges at the moment, and the final result has been that there has been a process of inflation, but it has been managed in the best possible way with large major economic challenges, and then also return to price stability. And we haven't fallen into complacency, I'm pleased to say. We've learned lessons from all of these episodes with the revision of the monetary policy, as you've mentioned. So I wanted to ask you about this.
What are these lessons that you've learned from previous episodes of inflation, which are particularly useful now and will allow us to improve our responses in the future to deal with inflation developments on the markets at the moment. Thank you.
Well, thank you. Thank you.
Luis de Guindos
Thank you very much for your kind words. Let me say something with respect to these eight years. I have sort of two different feelings that are a little bit at odds. The first one is that time flies. But the second one is that when you look at the world today, it's very different from the one that we had 8 years ago.
So it's a sort of contradiction between how rapidly time flies and the kind of events and challenges that we have been facing over the last eight years. Going to your concrete question. I think that, you know, the situation in 2022 is very different from the one that we have now. In 2022, we had the pandemic. We had the reopening of the economy.
We had a very expansionary fiscal and monetary policy. Remember, TLTRO, remember PEP, remember, the fiscal deficit went to something close to 7%. And afterwards, we have the reopening of the economy, and we had the invasion of Ukraine. And I think that, you know, this sequencing of events, you know, was, you know, quite unique. Now we have the conflict, the war in the Middle East.
That's something that is having an impact on energy prices, something that is quite obvious. It's a supply side shock that is going to reduce growth and to increase inflation. But monetary policy is in a totally different situation, and fiscal policy as well is different from the one that we had in 21 and 22. Having said that, well, you know that last week, we decided to keep interest rates to stay. I think that the idea is to gather more information about, you know, the evolution of the conflict that is an exogenous variable that we do not control, that we do not have under our control.
And simultaneously, we'll have new projections. My personal view is that perhaps the supply side shock has been reflected more rapidly on inflation indicators than on growth indicators. Well, we had the growth rate of the first quarter, the flash estimate, 0.1. But my impression, my view is that in order to know what's going to be the impact of the conflict on growth, we will have to wait a little longer. We have some leading indicators, some soft data, for instance, sentiment of consumer that really the evolution was very negative.
So we will have to wait a little bit more. So that's why I think that the decision of the governing council that was taken unanimously in the governing council, it was the correct one. We will have to wait until June. We will have more information. We will have new projections.
And so in this kind of situation, with a very complicated geopolitical situation, it's very important to have a cool head and to go data dependent and meeting by meeting. That's going to be the strategy that we're going to implement.
Good.
Jonás Fernández
Afternoon, Vice President. It's an honor to receive you here. And as my colleague said, this is a moment to express gratitude to you. And with this being your last appearance here, on behalf of my outgroup, my party, I would like to thank you personally for your cooperation over the years, and the success in managing monetary policy, which has gone through difficult times over the years, and I believe that you have managed the situation reasonably well. So I would like to express the gratitude of my group and myself.
And I too would like to follow on from the question asked by my colleague. The scenario that we're looking at at the moment is rather different, as you yourself mentioned, to how it was from the time of the COVID crisis. At that time, we had risks that were associated with inflation, and that allowed us to work on an expansive monetary policy. The conditions are very different if we compare them to current day. And if we look at prices as well, we've seen changes there following the invasion of Ukraine by Putin.
At any rate, this is a crisis that is unfolding at a slow pace. It's like it's being filmed in real time. We know that the commission commissioner Dombrovsky is talking about this at the moment, risks of inflation as well. But we're looking at what's happening on the stock exchanges as well. And the perception that we have of the situation, I don't believe is in line with the actual risks we're facing.
So I would just like to hear you expand upon that point, please, Vice President.
Well, thank you. Thank you very much.
Luis de Guindos
Thank you again for your very nice and kind words, totally undeserved. I think that you have made the points about the kind of disconnect between markets and the potential evolution and the outlook of the economy that I think is something that is quite relevant. Valuations are very high. They continue to be very high. Markets are discounting a very benign scenario that the conflict is not going to last, that the economy is not going to suffer much, that monetary policy, the tightening, is not going to be relevant.
I do not refer only to Europe. I refer as well to The U. S. That investment in artificial intelligence is going to push the economy, that is going to increase the growth rate of productivity. So they are discounting a very benign scenario that perhaps if it does not become real, perhaps can give rise to a correction.
And this is something that we have indicated in our financial stability reports. Simultaneously, with high valuations of markets, there are a couple of things that we have indicated about potential financial stability risks. The first one is fiscal policy. Fiscal space is very limited. The European countries, they have to implement a new defense policy with a lot of defense spending, and, well, mitigating measures for the energy shock.
We have indicated in the past that it should be very focused, temporary, and very concrete, focusing on very concrete segments of the population. And finally, the third risk that we have identified is non-banks. Now there is a lot of noise with respect to private credit. The exposure in Europe of private credit is much more limited than in the U. S, but the interconnections and the liaisons between private credit and the rest of the financial system are becoming more complex and more intense.
So these are the elements. But I think that here, well, the risk is that perhaps this very benign scenario that markets are discounting will not become real. We can have a sort of accident, and that could give rise to stress and tensions in the marketplace. So far, the evolution of the markets has been very calm. Even if you look at the government bond market, well, we have seen an increase in yields, but the spreads have been more or less contained.
But this is something that we'll have to monitor and look at very, very carefully because financial stability is one of the elements that can amplify the potential shock coming from the oil market and the energy market in general.
Johan Van Overtveldt
Thank you, chair. Mr. De Gindols, dear Louis, always good to have you here, unfortunately for the last time. But very good memories also from our time together, you know, in the Middle Ages when we were both Ministers of Finance and dealing with some crises. I tend to disagree a little bit with my two colleagues on what is happening now.
To put it bluntly, I fear the ECB is about to make the same mistake as it did in 21, 22, waiting too long to get up and get policy changed in relation to the inflation rate. At the end of the 1, inflation was 2%. It showed up to 5% by the 1. Then came Mr. Putin, of course, and inflation showed up to 8.5%, 9%.
And only then, the ECB started to react. So I think today, where we have already seen more or less a doubling of the inflation rate in the past three months, we should, or the ECB should, I think, be ready to act because otherwise inflation expectations will de-anchor and the process can start all over again within, as you certainly remember, the huge contraction of monetary policy with interest rates quickly going from 0% to 4%. Do you share that fear? And my second question is, I would very much like to hear your opinion on the development of stablecoins, because my fear is a little bit that the central bank might lose part of control of money creation through these mechanisms of stablecoins. Thank you.
Luis de Guindos
Well, thank you. Thank you very much for remembering the old times, that at least the good part is that we were together enjoying the meetings of Europe and the ECOFIN at different times. From the present situation, sometimes a little bit more difficult, but as well, always very interesting. Coming back to my view is that the situation now in terms of the monetary policy response and the environment is not identical to the one that we had in '21, '22. The monetary policy was extremely expansionary in those times.
Remember, we had negative interest rates, minus 40. We had injected a lot of liquidity in the banks, and we had also pursued a QE with PEP, the program that we bought almost €2,000,000,000,000 in bonds. Fiscal policy was much more expansionary. And so afterwards, we had the pandemic, the reopening of the economy with the bottlenecks. It was a combination of demand-side and supply-side shocks that altogether gave rise to a situation that was complicated.
I can accept that, with the benefit of hindsight, that perhaps we should have acted before more forcefully. But what I can tell you is that now the situation is not comparable at all. If you look at fiscal policy, well, the fiscal deficit is around 3%. The level of interest rates is 2%. We are in the middle of the QT process.
We are reducing our balance sheet. We are not expanding our balance sheet. We are reducing the size of the balance sheet. And we have an external exogenous variable that is the evolution of the world, and this is a supply-side shock that is going to create some dilemmas for any central banker: lower growth, higher inflation. And I think that we have to keep, you know, a cool head, and that's why, you know, we have kept interest rates.
But I think that the situation now, if you allow me to say, is not comparable to the one that we had in 2021, 2022. The stablecoins, well, an interesting development, private money is going to be a means of payment. I think that this is something we have to take into consideration. There are some central banks that have started to deal with the issuers of stablecoins, not only on the other side of the bond, but as well in The UK. And this is something that we have to follow very, very closely.
You know perfectly our view. Our view is that we are not against, you know, the issuance of stablecoins denominated in euro at all. What we want to do is to close the loopholes that now in terms of protection of the investors, potential investors in stablecoins or the holders of stablecoins, we have now with our regulation and the possibility that some people can take advantage that we are a little bit more generous than in other jurisdictions in order to take advantage of this loophole. I think that is a reality that is going to be there. I am much more optimistic with respect to tokenized assets.
That is another development that, you know, is the digital world. And that's why I think that our project in terms of independence from other jurisdictions of the digital Europe is going to be crucial. It's going to be key for us.
Dirk Gotink
Thank you, madam chair. Thank you, mister Regindus, and also gratitude from my side as the former speakers. Now I have a question about you referred already to it that we're looking at this from a meeting to meeting approach. But I think what many people feel when they observe somehow global affairs is that uncertainty is not any more connected or correlated to events, but it's more implicit in the system. In a way, because the hegemon is behaving so erratically that this uncertainty basically permeates the entire decision making chain and, well, ends up in the situation where we are.
We see the tariff situation this week or moves. We see the supply chains, critical raw materials when it comes to China. We see sanctioning of the ICC judges. My question is then which executives or politicians are next to be canceled from the payment systems? The boss of or maybe a.
Who knows? This is serious because everyone is pricing this uncertainty into their decision making, also economically, but you will have so I would basically ask, is this meeting by meeting approach appropriate for something that seems to be systemic? And if you could reflect on what where the balance is then for the systemic versus event-related uncertainty? Thank you.
Luis de Guindos
Well, I fully agree with you that the world is very different from the one that I knew and that we knew eight years ago. That, you know, now, you know, with the arrival of the new US administration, it's a totally change of paradigm in terms of, you know, international the international relation framework. And that the main conclusion is that we have to become much more independent from other kinds of jurisdictions in the sense that, you know, autonomy is becoming crucial for Europe. And this autonomy is polyhedral. You know, it's going to be has to become real, you know, in different aspects. Defense is something that is quite obvious.
You know, for instance, on the technological side, we have a lot of dependency with respect to the cloud and with respect to the international, to artificial intelligence as well. And I think that this is something that there is a gap that we have to bridge because otherwise, well, as I have said, the hegemon could use this kind of situations in order to take advantage and to weaponize these gaps. And so Europe is something that we cannot accept. And something similar happens with the means of payment. That's why digital Europe is key for us from a, you know, an independent standpoint, you know, in this new context of the world, the world economies with new rules.
So, but, simultaneously, you said, well, you know, uncertainty is going to be part of the system. Now it's not an exogenous variable. It's something that is totally endogenous. Well, I think that I can agree with that, but let me say something. When uncertainty is huge and is endogenous, then perhaps, you have to be much more careful with the kind of decisions that you take, because the outlook and your predictions are going to be subject to a higher level of question marks and uncertainty.
And that's why you cannot, in this context, forward guidance, that is to give an opinion about what might happen over the next three months or six months or twelve months. I think that this is a little bit unrealistic. I think that you have to look at the data, to look at decisions taken by other jurisdictions, and simultaneously to react because this is going to have an impact on inflation and growth. So a cautious, prudent approach, I think that, in my view, is the one that we have to pursue in these circumstances.
Aurore Lalucq
Alright. I'll give the floor to myself now. And I have two questions. First, on cyber risk. We saw with MITOS and especially what a colleague has just said relating to AI and how AI can attack our vulnerabilities and our data.
This means that these weak points exist. If we can detect them, it means they exist. So when it comes to the BCE, are you looking to be more proactive and to tell banks to be more proactive on cybersecurity and our data? Because as we know, between the coming twelve to eighteen months, we're going to have massive attacks. It's not the end of the world, but it's not very reassuring.
So will the European Central Bank be taking any specific steps? And when it comes to private credit, we're very focused on the fact that we've seen signals coming from the American side. We know that finance and banking are interconnected. So do you see any problematic interconnections that could put our financial stability in danger? And since I have a few more seconds, if you apply American standards, this will be more constraining for large banks when it comes to capital holdings at the EU level.
It's often something we don't talk much about on this side of the Atlantic. Could you please comment on that, say something on that topic? Thank you.
Luis de Guindos
Well, thank you very much, Madonna. Think that you have raised two very hot topics. The first one is, you know, cybersecurity and mythos. You know, first of all, my impression, you know, because I am not an expert, is that we are going to have, you know, a long queue of, you know, new models, new instruments, new tools that are going to be similar to mythos. That is not only a single situation that, for sure, that there are quite a few that now, you know, in the pipeline, there are, you know, these kind of models that, in principle, you know, should be focused on identifying the flaws of your operating systems, but that if they fall in the wrong hands, can give rise to a lot of problems.
I think that the conclusion for the ECB is twofold. First of all, it's for us, for the ECB in itself because, well, we are responsible for the payment system and we have to try to strengthen as much as possible our defense against these potential cyber attacks. And the second dimension is because we are the supervisor of the banks, and the banks can be attacked as well. So far, the, you know, the information that we have is that, you know, the program, the mythos, the model has been shared only with American companies.
And.
Luis de Guindos
I hope that it will start to be shared also with European companies. I suppose that here, the cooperation between the different European institutions is going to be key between the ECB and the European Commission and with your under your control. But I think that it's a totally new situation, and it makes very clear that cybersecurity is becoming a high priority, because now the possibilities of an attack have increased. Your second question is about private credit. Well, in the last, you know, in the next report that is going to be published before May, we are going to dedicate, you know, a full chapter to private credit and the potential financial stability risks that private credit poses.
First of all, there are pros and cons. Private credit, they are financing, you know, some projects that normally would not be funded by the banks or even by capital markets. So in that respect, this is something positive. They are, you know, for the real economy, there are some corporates that, otherwise, they could not have the finance. But now through private credit, they are getting, you know, the funding, the funding, and long term funding in very concrete and very specific conditions. So that's the good part.
And capital allocation in that respect improves. Nevertheless, there are a lot of potential cons and potentially negative implications of product grade. The first one is the opacity. Mhmm. They are opaque instruments.
There are doubts about the evolutions of, you know, the credits that they have in their portfolios. You have to bear in mind that as well, in the case of The US, they have invested quite a lot in insurance companies. And insurance companies, they have increased in The US their exposure to private credit. Simultaneously, you have to consider private credit in a more ample, let's say, circle with private equity because the sponsors of private credit and private equity, they are identical. And, normally, when there is a deal, a buyout by a private equity company, they also, afterwards, you know, the funding and the leverage is delivered by private credit.
The links with the banks is something that is clear because they are competitive competitors, because they are funding the real economy, and simultaneously, they are clients. And they are becoming very good clients of the banks. Our conclusion is that now they do not give rise to a systemic financial stability problem even in The US because they are growing very fast, but they are not big enough. But I think that, you know, it deserves a lot of supervision. We have to deliver some macro potential instruments in order to control what's happening with private grade.
Bear in mind that, well, there are some positives, but as well that there are some aspects that we will need to have, you know, some additional oversight about the evolution of product grade.
Dirk Gotink
Maybe just a follow-up. Because then when you talk about inflationary pressure, autonomy, the autonomy we're speaking about to somewhat deal with this endogenous uncertainty costs a lot of money. Drives, is it correct to consider that to have inflationary upward pressure? So this rat race to autonomy that everyone's now thinking about, and everyone's either looking for leverage over someone else or autonomy or to lower leverage on the other. Is there an analysis on the inflationary pressure related to these bigger processes?
Luis de Guindos
Well, before the war, we said very clearly that inflation was in a good position. Headline inflation converged to 2%. Even core inflation, the different indicators of core inflation, the evolution was positive as well. We were happy with the figures that we had about services, about wage dynamics. On top of that, we have this supply-side shock.
Well, we hope that this you said, well and I can accept your point about that. Now there are a lot of uncertainty of how the hedge money is going, you know, to develop. And this is something that, you know, we are the paradigm. The paradigm has changed in that respect, not only with respect to inflation, but as well with respect to the banking regulation and with respect to the regulation of cryptos or even nonbanks. So this is the new reality. It's a new reality that things are much more difficult. But I repeat.
I think that in this new context, a prudent, goal-headed approach is going to be much more needed than before. And that's why the data dependent and meeting by meeting approach is going to be the current one. You know, I am a supporter of Atletico Madrid, and the coach of Atletico Madrid says meeting by meeting, I'm much, by much, and I suppose I hope that tomorrow we will be able to meet Arsenal in London.
Aurore Lalucq
Yes? No more requests for the floor? No.
Thank you very much for all these years of cooperation, the excellent debate we've had with you. Thank you for coming here today, and we do wish you all the best in the upcoming football match.
Okay. So we now turn to the consideration of amendment to the draft ECO and opinion of the single market and customs program prepared by reporter Gilles Boisier. The single market and customs program integrates four programs under the current MFF, notably Fiscalis, which finances cooperation between EU tax administrations. It also covers the development, production, and dissemination of European statistics. So I will now give the floor to the reporter, Mr. Gill Boyer, for six minutes.
Chair. Six minutes.
Gilles Boyer
Thank you. That is tremendous. So I've already had an opportunity to present this draft opinion in our committee. So just allow me to briefly touch upon its main features in light of the amendments that were proposed by various political groups, whom I would like to thank. This draft opinion is fully inscribed in the commission's process of simplification, and this is an ambition which I support wholeheartedly.
My objective, however, was to strike an apt balance between, on the one hand, increased flexibility, which is desired, and, on the other, the need to preserve solid assurances regarding transparency, responsibility, and democratic control. So in this light, I wanted to significantly beef up the monitoring requirements, regarding reporting and evaluation as well. In particular, I propose that we reintroduce a complete evaluation framework with a systematic introduction of the results, and bring them to the European Parliament so that we can maintain political and democratic control in actual fact. And particular attention was devoted to the taxation and statistical aspects of the program, with a view to clarify and consolidate them and reassert their priority. Now regarding the amendments, I'm very pleased to see that there is a great deal of agreement between the various political. Many feel reflected in my opinion, and there is shared support.
And I especially welcome the desire to strengthen the program in the area of digital transformation in the single market, as well as developing administrative capabilities at the tax authorities. I'm also very pleased at the agreement, which seems to be taking shape regarding strengthening, monitoring, evaluation requirements, in particular through adopting work programs through implementing acts. And I welcome the proposals that aim to ensure that the committee assisting the commission meet in order to address the various program objectives and involve the stakeholders as much as possible. Similarly, the objective of better identifying priorities is something that meets wide support. And in this sense, I would like to include several proposals by my colleagues, in particular those that wish to improve transparency and allocation of resources and monitoring of progress achieved.
Simplification must remain the guiding light of our work. And in that sense, I fully support the initiatives that intend to strengthen the interoperability of our digital systems in order to avoid any overlap in reporting obligations. We're already working on a compromise proposal, which I hope will meet wide support. I think that the priority today meets with wide support, and I rely on you, dear colleagues, to continue the work in the spirit in which it began. Thank you very much.
Aurore Lalucq
Madam Angelique. Thank you, Robert. Angelika Witzing is not here. She will be represented by mister Gotzing for p EBP. Sorry.
Dirk Gotink
So I will read up the statement of Miss Winsig, who says, I would like to thank the rapporteur for the excellent work so far and all colleagues who submitted amendments. We're very pleased with the current text, as many EPP amendments have been taken into account alongside those of other groups, resulting in a very solid compromise. We've stayed within our remit, focusing on the areas where Econ adds the most value, which, with some of my amendments, I hear was not the case, which is why they were considered nonreceivable because I'm working on the file in Imco. So the secretariat did a good job in sort of limiting my scope of influence. At the same time, we successfully managed to embed a high level of transparency and accountability into the draft, which was a key priority for us, and I believe we have found a very good approach here.
Since it seems like there's a good consensus, I believe we can move forward swiftly and finalize this via a recent procedure to reach a positive conclusion. So I guess, Mr. Boire, this is a very good scorecard. Thank you.
Aurore Lalucq
Thank you. I don't think that Ms. Benkova is here for the S and D. Okay. For PFE, Thomas Kubin.
Tomáš Kubín
Excuse me. We have some. We don't have any.
It means I've spoken now just for myself. Okay. Excellent. And for a colleague of mine. Great.
So which language should I choose?
Just wait a second. Okay? Everything is fine.
Is that okay?
Okay. You can start again.
Tomáš Kubín
Okay. I will give you another portion of my Czech language.
Can you hear me now? Okay. So let me thank miss Rappoteur for the first compromise text. We support this program generally, but there are also a few smaller programs that fall under this program now. As I said in March, the European statistics, since it is now under the program for the single market and the customs, will suffer.
And I think that the compromise tax does not pay enough attention to that. The European statistical program was excluded, but the new compromise text does not reflect it. In other parts, the tax could be more streamlined. It's like to overload it. We can see it in article three, about the goals of the program.
On the other hand, the comitology in article 11a is a positive thing. So thank you again to mister Rappoten, and I'm looking forward to the next cooperation.
Aurore Lalucq
Thank you very much. Missy Valdini is not here. Well, we have no further speakers, so I can give the floor to the rapporteur to conclude if he so wishes.
Gilles Boyer
I would like to.
Thank my colleagues for their encouraging words, which really support us in our work, and I think that we will achieve results that meet with wide support. Thank you. The vote will take place on June 3. That's a good date.
Aurore Lalucq
We now turn to item six of the agenda as a consideration of the amendment to the report. Okay. So everyone is here. We now turn to Item six of the agenda, the consideration of the amendment to the report on the excess of the European Public Prosecutor Office and the European Anti-fraud Office to value added tax information at union levels. The reporter is Mr.
Aji Pantella. Overall, the commission proposal appears to respond to the European Parliament's priorities as set out in the VAT in the digital age report. Members have tabled 85 amendments and are threatening the fight against intra-community VAT fraud while ensuring strong data protection safeguards. These include aligning access for the EPO and OLAF with operational needs, limiting and targeting data access in line with recommendations from the European data protection supervisor, and stressing the need for adequate resources for the secure and effective implementation. I think that mister Agiponteila cannot make it today, so Mr.
Navarrete will speak on behalf of the reporter.
Fernando Navarrete Rojas
Thank you, Madame Chair. And on behalf of the reporter, my colleague, Hachi Pandela, let me read you the following. Dear colleagues, let me begin by underlining that for this draft report in total, 85 amendments have been introduced, all broadly moving in the same direction, strengthening the Commission's proposal while ensuring full respect for the data protection principles. The amendments place particular emphasis on strengthening safeguards in line with the recommendations of the European Data Protection Supervisors. They clarify and strictly limit the categories accessible to EPPO and OLAF, ensuring that access is granted only when it's necessary, linked to a specific investigation and carried out by authorized users.
A broad majority of political groups also underscore the need for adequate financial resources to equip both parties with the technical infrastructure required for secure and effective data access. Overall, these amendments aim to ensure that we reinforce the fight against cross-border VAT fraud, while guaranteeing that access to sensitive data remains targeted, proportionate, and fully compliant with EU data protection standards. Finally, let me briefly outline the next steps. Today, the first technical meeting was held, and on Wednesday, May 6, the first scheduled meeting will be held. We aim to adopt the report in committee on June 3, with a plenary debate and vote foreseen for July 2026.
I believe that our discussions will result in a good compromise text, with wide support from the political groups. Thank you. And this is all from Mister Hachi Bandela.
Aurore Lalucq
Thank you. On behalf of Miss Carla Tavares, Ronald Fernandez for the SMD.
Jonás Fernández
Thank you so much, sir. Carla Tavares, our shadow reporter on this dossier, cannot attend this meeting, and she asked me to read this statement. So, dear colleagues, for the S and D group, one of the key objectives of this report is to ensure a proper institutional balance between Olaf and the EPO. These bodies operate at different, but complementary, stages. European public prosecutor's office on the criminal side in investigation and prosecution, and European anti-fraud office on the administrative side in detection, prevention, and the protection of the union's financial interest.
Both play an indispensable role in protecting the union's financial interests. In this context, we believe it's important to civil war three principles. First, effective but targeted access. Access must be case-based, proportionate, and linked to concrete investigations. Second, robust safeguards on data protection and control.
This includes clear requirements for traceability, logging on access, and post verification mechanisms, ensuring transparency and accountability. At the same time, we should ensure that the overall structure of the report reflects our search objective, enabling effective access to VAT data for Olaf and EPO, while ensuring the necessary checks and balances without creating, sorry, unnecessary duplication or ambiguity in the legal framework. Finally, the system will only be credible if it's backed with adequate technical, human, and financial resources to ensure secure and effective implementation. We look forward to a swift and credible agreement that we can support. Thank you so much.
Just a fast check translation.
Tomáš Kubín
Thank you. I would like to thank Mister Haji Pantella for a very well-prepared report. I believe that we can all agree that we have here legitimate objectives and that sharing value added tax information at EU level is worth it. Now we just need to set specific conditions for this to happen. I believe that most shadow rapporteurs believe that we need to focus on the investigation purposes.
We presented our own amendments that consider the activities of Olaf and the protection of the private data. I would like to thank again the rapporteur, and I believe that we will finalize this work.
Aurore Lalucq
So I'd like to give the floor to Mr. Boyer, who will speak on behalf of Mr. Deux.
Gilles Boyer
Behalf of our shareholder reporter Le Deux, a few words. The amendments we have tabled build on the key areas already reflected in the reporters' initial position. Our goal is to go further to deliver a clearer, more robust proposal that guarantees both data protection and operational efficiency by design. First, we are calling for the initial flow of information between EuroFISC and the EPO and OLAF to be strictly limited to what is necessary. Second, armaments introduced preventive mechanisms to guard against untargeted searches and the automatic attribution of access to an ongoing investigation or prosecution.
Alongside this, we are requiring comprehensive ex-post access logs. But most importantly, we envisage these safeguards to be built into the commission's technical implementation from the outset. Third, and finally, we address the question of resources. The EPO and OLAF must receive adequate additional funding to implement these new responsibilities. We believe this amendment strikes the right balance, and we look forward to further work.
Thank you.
Tomáš Kubín
I don't have anything to add on behalf of the rapporteur, Mr. Hachi Bandala. You.
Aurore Lalucq
Okay. So thank you for this discussion. And the vote in Econ is scheduled for June 3. So many important votes on June 3. Okay.
So our next item on the agenda is the consideration of amendments to the so-called tobacco taxation package, which consists of two legislative files and an amending directive as regards the general arrangement for excess duty in respect of tobacco and tobacco-related products, and a recast directive on the structure and rights of excess duty applied to those products. These two legislative files are treated as a package and share the same reporter, Mr. Thomas Kubin. And the floor is yours for 6 minutes.
For the third time today, the Czech language. Thank you.
Tomáš Kubín
So thank you, Madam Chair, colleagues. Since the last debate that we had about this topic, we negotiated very intensely. Mid-April, we received 335 amendments, and I would like to thank everyone for sending them to me. It shows that these two directives, one technical and one more factual, are very important, even though they're not binding, so they're more consultative. The first compromise text that we presented, we tried to reflect the varied opinions.
We also used all six political groups' amendments. We also presented a better definition for the tobacco product, the indexation of the price level, transitional periods, and the minimum rates for certain tobacco products. So if we have new tobacco rates for new products, that was difficult because we had very contradictory tendencies in the amendments. Somebody wanted a higher level, somebody wanted a lower level, etc. So to find a compromise in the rates, I really read through all the amendments, and that is why the rate that I proposed is basically an arithmetic average.
The explanatory statement explains that if we raise the minimum rates, we have to be very careful. Otherwise, we could distort the market and maybe provide motivation for illegal trading. And we should also take a look at what influence taxation can have on public health. The first meeting with Shadow Rapids happened last week in Strasbourg. I would like to thank all three colleagues who came.
The meeting actually was after a very long vote in the plenary, so I really thank you for coming even after such a long vote. And I believe that we have found the main pillars of the text. And this week, we will have a technical meeting. And in May, during the plenary week, we will have, hopefully, the last shadow meeting. I would like to thank once more all colleagues who participate in providing input into this text.
And for me, it is not important who presents it, which political group, but I believe that what is important is to find a compromise that is acceptable for the whole European parliament. Thank you.
Aurore Lalucq
Thank you. On behalf of Marco Falcone, I give the floor to Fernando Navarrete.
Fernando Navarrete Rojas
Thank you, Madam Chair, again. And on behalf of my colleague Marco Falcone, I want to read the following statement. The draft opinion by our colleague Kubin provided a good starting point for reaching a balanced and pragmatic final text in line with the objectives of the European People's Party group. The amendments tabled have added valuable input and are helping us in the negotiation phase to build a solid convergence. We hope this can be as broad as possible, so we can vote already in June on a proposal based on a well-balanced and sensible compromise.
We are taking into account everyone's proposal. It might sound methodical, but it is not, including those who currently have the greatest reservations about the compromise. Let me start with the first point, definitions. Important work is being done to streamline product definitions, taking into account new market realities such as smoke-free products, while also aligning existing categories. Second, the increase in taxation and excise duties.
The rapporteur's proposal already introduced an initial reduction and restored a degree of flexibility for member states. We are improving it further along the principle of lower risk, lower taxes, ensuring that innovative products that help people quit smoking, as well as niche products such as cigars, are not penalized. We are following this approach because, in the current context, any EU initiative should support competitiveness and strengthen the productive fabric. We cannot risk introducing excessively high taxes that could fuel inflation, and ultimately undermine the objective of protecting public health. In addition, there are two risks we must avoid.
On the one hand, pushing consumers toward the illicit market or toward products from third countries. On the other hand, negatively affecting the competitiveness of the agricultural and industrial value chains linked to tobacco. On these common sense points, our call to all colleagues is to set aside preconceptions and focus on the best solutions in the interest of the European citizens. Thank you very much, madam chair.
Jonás Fernández
Hello again, sir. Good afternoon, also again. Cesar Louena cannot attend this meeting, but he asked me to read the statement. So Cesar Louena, thanks.
So of all, I would like to assert or reiterate that S and D defends the proposal that the commission has put on the table. So it is necessary to update tobacco excise taxes and put them in a common tax framework. However, S and D do not share the approach that the rapporteur has defended in the text, mainly because it reduces the main ambitions of the directive: positive, such as transition periods, as well as the indexing mechanism. This is why the S and D group feels that all of these are central points in the proposal. And through various amendments, the group feels that it is necessary to maintain and defend the commission's proposal, especially in terms of the rates, the transition periods, the inflation mechanism and the country by country price mechanism, as well as reviewing the directive, taking into account the future review governing tobacco products.
And in this sense, S and D feel that it's essential that we work on developing the draft directive based on a pro-European majority that has supported this committee. Thank you.
Aurore Lalucq
Thank you. Any catchy eyes? No? So I give the floor back to the reporter.
Tomáš Kubín
To conclude, I'd like to repeat two things. First of all, the parliament, through this directive or its original wording, has dealt with it fifteen years ago. That's a long time. And even though I've mentioned it's not a binding directive, and it is up to the council, it is a very important topic for us. And it is indicated what we may expect in terms of other behavioral taxes.
So we need to find a balance in this trilemma: tax revenues, health of our people, and single market. It's not easy. It's rather an adventure, and it's not something typical for tax administrations. However, I believe that we'll be courageous enough to find our way to come up with a reasonable compromise. At least so far, that's what it looks like.
Thank you.
Aurore Lalucq
Thank you so much. Thank you to all of you for the discussion, and the vote in Econ is scheduled for June 3. Definitely a lot of very important votes on June 3. Thank you so much, and we will be back tomorrow at 11. Thank you.
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