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Angela Merkel was also in the
Global Tax 50
2013 |
Angela Merkel remains the most powerful politician in
Europe, making her an obvious candidate for inclusion in the
Global Tax 50.
While her plate has been somewhat full in 2015 as she sought
to deal with, first, Greece and then the refugee crisis and
Germany's response to it, she still wields the political clout
to influence tax decisions across the continent.
Greece, perhaps, is a good place to start. Merkel's Germany
is the de facto leader of the Eurogroup, and she holds
great sway with Greek creditors seeking to find a solution to
Greece's decades-old tax collection woes.
It was Merkel, along with her finance minister Wolfgang
Schauble, who closed the deal on Greece's 11th-hour bailout
this summer. Alexis Tsipras, the Greek premier coming off a
resounding 'no' vote from his people on whatever it was the
creditors had to offer, eventually had no choice but to give
in. Greece was crying out for expansionary measures, but
Germany's influence ensures that the southern European
jurisdiction will be made to honour its debts through VAT rises
and more.
The fear of falling out of favour with the EU-IMF troika is
so acute in indebted states that Portuguese President Anibal
Cavaco Silva took the highly unusual [though not unprecedented
– Portugal runs a French-style presidential republic]
step in November of denying an anti-austerity coalition power,
instead turning to pre-election leader Pedro Passos Coelho to
form a minority government.
"After we carried out an onerous programme of financial
assistance, entailing heavy sacrifices, it is my duty, within
my constitutional powers, to do everything possible to prevent
false signals being sent to financial institutions, investors
and markets," said Silva.
Back to slightly clearer waters and Germany remains a key
member of the group of EU countries pushing for the financial
transaction tax (FTT), or 'Robin Hood tax', which would impose
a levy on financial trades if implemented.
After what feels like decades of dithering, the
jurisdictions involved seem to be finally moving towards a
workable model, despite Estonia dropping out in December 2015.
Without the significant weight of Merkel's Germany behind it,
the FTT would undoubtedly completely dead in the water by
now.
There are, however, examples of Germany's – and, by
association, Merkel and Schauble's – influence fading
a little. For all the strong-arming we saw in 2014 around the
issue of intellectual property taxation, after Germany
eventually persuaded the UK to water its patent box legislation
down, the OECD's BEPS Project ended up legitimising the use of
such patent boxes, setting out best practices for their
use.
Germany, once a staunch opponent of patent box regimes, now
looks set to introduce its own. As powerful and influential as
Merkel is, politicians can only do so much when faced with tax
competition from near neighbours.