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EU's finance ministers discussing impact of digital development on finance

Toomas Tõniste.
Toomas Tõniste. Source: (Reuters/Scanpix)

The European Union's finance ministers are meeting in Tallinn on Friday and Saturday to discuss how the eurozone can be strengthened, the use of the EU's financial resources improved, and new digital solutions integrated in finance. Ways to modernize the EU's taxation system as well as IT systems for the EU's customs union are on the agenda as well.

The eurozone ministers will meet first, a general meeting of all EU finance ministers as well as the governors and presidents of the member states’ central banks will follow.

“The euro is the common currency for 19 countries and 340 million people. After the United Kingdom leaves the EU, the euro area will account for 85 percent of the EU’s gross domestic product. The euro has already proved itself, bringing about more stable prices, lower interest rates, smaller transaction costs, and a lower exchange rate risk,” Estonian finance minister Toomas Tõniste said in a press release on Friday morning.

According to Tõniste, one of the union’s aims in financial policy needs to be more harmonization in terms of member states’ economic growth. With “better and clearer policy coordination between countries,” Tõniste also sees a chance to increase the union’s resilience to crises.

“In today’s meeting we will talk about strengthening the rules of the economic and monetary union, possibilities of managing and sharing risks, and improving the management structure. At the same time, we will also discuss the possibilities to use EU financial resources more efficiently,” Tõniste said.

Another topic on the agenda is financial technology, or in other words the impact of the rapid development of digital technologies on the financial industry. While new solutions should be adopted by the “otherwise conservative” financial sector, making them safe to use was important, the minister pointed out.

“We have to come to an understanding about how much innovation should be regulated in the financial sector, and whether more harmonised rules could help improve the competitiveness of the EU in this area,” Tõniste said.

On Saturday the ministers will discuss ways to modernize the EU’s tax system, currently at a disadvantage considering the new business models that the technological development in the area of finance had brought about. The fact that too much of the current system still reflected the previous century meant that revenue services around the union missed out on substantial sums every year.

Those companies that had emerged thanks to the Internet and new technology needed to contribute to the development of society through the taxes they pay just like traditional businesses, Tõniste said. He added that he was curious about the experience of other member states in this field.

The informal meeting is taking place as part of the ongoing Estonian presidency of the Council of the European Union.

Editor: Dario Cavegn

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