Global economy still needs regulation - Minister
Regulation of the global economy – Reply given by M. Michel Sapin, Minister of Finance and Public Accounts, to a question in the National Assembly (excerpts)
Paris, 10 December 2014
While the most horrendous effects of the last financial crisis of 2008-2009 have slightly faded, the causes themselves haven’t yet disappeared. We mustn’t lose sight of the fact that today we must still implement regulation of global finance and also – we’re doing so and I’ll tell you how – apply mechanisms to combat all those activities which evade all forms of ethics of whatever nature and end up, for example, encouraging tax evasion and optimization.
You’re right, we must indeed act at international level, because when it comes to globalization of this nature, when it comes to movement of capital, it’s the only level at which we can be effective.
As you know, what the international community has chosen is to work at the level of the G20, which brings together the world’s 20 largest economic powers, namely of course the European and North American powers but also all the large emerging powers, particularly in Asia, which also have this desire for regulation.
In fact, we’re continuing global regulation. It’s been done in the banking field: for example, in Europe, we yesterday adopted the final provision necessary for establishing banking union, so as to cut the link between responsibility for banks and national budgets – budgets paid for by all taxpayers.
We must go further, particularly in combating tax optimization. We’re doing so with several bodies, such as the OECD, which has made proposals in this area. I’ve also suggested to my Italian and German colleagues that 2015 should be the year when major principles in combating tax optimization are actually implemented at European and global level./.
Tax optimization – Reply by M. Michel Sapin, Minister of Finance and Public Accounts, to a question in the National Assembly (excerpts)
Paris, 10 December 2014
There may be technical, legal or commercial reasons why a company, even if it is public, has sites abroad.
However – and I say this to you very clearly – I won’t tolerate any siting carried out with a view to tax optimization. And the Economy Minister and I say it to all public companies, in which the state obviously holds a stake. We’ll be very precisely informed of any possible sitings and the reasons why they’ve taken place, and on the basis of this information the requisite decisions will be taken, if need be, to put an end to tax optimization mechanisms.
I want the public sector to be exemplary, so that France will be exemplary and can promote both at European level – we’re already doing that – and at global level this determination, which must be efficient and effective, to combat tax optimization. (…)
I say it clearly and simply, because this battle against tax optimization is absolutely essential if we want to both respect individuals, citizens – who want tax to be fair, distributed fairly and collected effectively – and guarantee the smooth running of our economy.
Otherwise, it creates distortions of competition between companies that comply with the law and morality – and there are many of them – and those which don’t.
That’s my priority, our priority. In the course of 2015, we’ll have made concrete progress in Europe in combating the tax optimization practices you rightly condemn./.