The EU and U.S. speeded up talks on a free trade deal on the Transatlantic Trade and Investment Partnership (TTIP). Both sides confirmed their commitment to reach an agreement by the end of year. During the twelfth round on TTIP negotiations, with the participation of Chief Negotiator Ignacio Garcia Bercero and U.S. representative Daniel Mullaney, the parties discussed regulatory standards and an investor court system for settling disputes. They also decided to have two more round of talks before the summer.
The European Commission’s investigation for Google’s monopolistic practices continues. Google’s CEO Sundar Pichai met with EU’s competition chief Margrethe Vestager and Digital Chief Gunther Oettinger to improve relations. Google’s advertisements and Android system as well as its tax practices also come under the scope of the EU.
Cost of Schengen
Erman Bertelsmann Foundation’s study revealed that the end of the passport-free Schengen system could cost between €427 billion and €1.4 trillion by 2025.
“A permanent reinstatement of internal border controls would have a dramatic effect on economic growth throughout Europe, causing a noticeable decline in prosperity,” the report stated.
The report further said that if Schengen were to collapse, the negative economic effects would be felt even outside of Europe. Over ten years, the gross domestic product (GDP) of Europe as a whole would drop by some €470 billion. A more pessimistic scenario assumes that the price of imports would increase by three percent. Cumulated GDP losses would then total €235 billion in Germany, €244 billion in France and €1.4 trillion in the EU.
EU discussed the reform of the VAT system. After the European Commission’s College meeting EC Vice-President Dombrovskis said in 2014 that “VAT amounted to almost €1 trillion, which is equivalent to some 7 percent of the EU’s GDP. The VAT gap, or the amount of VAT revenue which is lost, is around €170 billion every year. Out of this, around €50 billion is lost because of fraud in cross-border business transactions, such as carrousel fraud or missing trader fraud. This is unacceptable.”
He added that there is an urgent need to act. At the same time, VAT rules account for a significant administrative burden, especially for SMEs and digital businesses.
The Competitiveness Council, which brings together ministers responsible for trade, economy, industry, research and innovation, will meet in Brussels to discuss the current situation of the European steel industry. Ministers will consider viable solutions to redress the industry’s fragile situation and other ailing energy-intensive industries. The sector has been hit hard by a number of factors recently: weakening demand, high energy prices and unfair trade practices.