Deadlock over EU venture capital report 'unacceptable'
by Philippe Lamberts
The EU Council has brought negotiations with the European Parliament over new provisions to encourage investments in innovative business to a standstill
For the first time in this political term, I have been appointed rapporteur of a legislative text, the venture capital report, which aims to encourage investments in venture capital funds across the European Union. Venture capital funds can be seen as a springboard for new and innovative companies that do not have access to banking loans, precisely because of the 'risks' associated with their innovative character. The core objective of this legislation is to create an EU passport for all venture capital funds, which would help them raise funds across Europe.
As one can imagine, this was supposed to be an easy and smooth dossier. Who would oppose new provisions to boost investments in innovative business? Until recently, smoothness was indeed the word that best described the negotiations and process around this file. On June 28 the European Parliament even managed to strike a deal with the Council, under the Danish presidency. This deal included a provision, introduced by the Greens and endorsed by a large majority of the parliament, to exclude from the EU passport venture capital funds either domicile in tax havens, or that invest in companies domiciled in tax havens. The text also proposed a definition of tax havens far more ambitious than the Organisation for Economic Cooperation and Development's, which is currently accepted as the norm in this field.
On June 30, at the end of the negotiations, something unexpected happened. The council, after having proudly announced the deal under the Danish presidency, broke the agreement under the leadership of the Netherlands and a group of member states. This, unsurprisingly, has brought the entire procedure to a stand still.
This deadlock is unacceptable for two main reasons. Firstly, questioning an already sealed deal not only shows a complete lack of respect of the council vis-à-vis the Parliament, but also demonstrates how unprofessional the council has been in leading these negotiations. Secondly and more fundamentally, this also illustrates the cupidity of some EU governments who, despite their talk on tax havens and the need to eradicate them, undermine any legislative attempt that has a chance to contribute towards this objective. Some member states have clearly sensed that the proposed tax haven definition, could apply to their own country. It is no secret that most member states hide, somewhere in their legislation, some practices which can potentially create a 'tax haven'.
The process is at a stand still. On September 13, and for the purposes of coherence, the parliament adopted the text as agreed last June. We expect the council to take responsibility for its actions and do the same.
Philippe Lamberts is a Belgian MEP in the Greens/European Free Alliance group. He is also co-president of the European Green Party
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