Photo : Kongsberg
14 May 2024, Tuesday | NIAS Europe Daily Brief #833
By Neha Tresa George
ESTONIA
Finance ministers to discuss on VAT legislation on hotel accommodation
On 13 May 2024, Politico reported that finance ministers would gather to discuss on VAT (Value-added tax) to be imposed on online accommodation rentals and taxi rides. The new legislation would require the hotel and taxi booking sites to register for the sales tax, thus hiking prices by 25 per cent. There were concerns about the disproportionate burdens on small businesses and thus the new plan has allowed each EU member state to decide whether to opt for the “deemed supplier” arrangements. But the ride-sharing app Bolt, with its headquarters in Estonia, argues that the plans are unfair as many taxi drivers are small operations that do not have to pay VAT. With Estonia siding with this agreement, the EU faces an unanimity issue as the legislation should be agreed upon by all the members. (Jack Schickler, “EU Policy. Estonia threatens to block Airbnb tax-hike plan,” Euronews, 13 May 2024)
FRANCE
Macron’s business summit attracts EUR 15 billion investment projects
On 13 May 2024, Emmanuel Macron while hosting an investor summit in Versailles announced foreign investment projects worth EUR 15 billion in fields including technology, artificial intelligence, and pharmaceuticals. The ‘Choose France’ summit which is the brainchild of Macron would host some 180 foreign business leaders with 56 projects. The summit is aimed at attracting foreign investment and marking Paris’ position as the core financial centre as the country tackles low growth and a high budget deficit. Amazon has announced a EUR 1.2 billion investment in a data centre for its AWS cloud unit and a warehouse for its retail operations. Fertilizer producer FertigHy is expected to announce a EUR 1.3 billion plant, while Pfizer will put up EUR 500 million on top of a previous EUR one billion investment. The summit serves as a reassuring factor for global investors despite the crisis encountered by the country. (Clea Caulcutt, Paul De Villepin And Giovanna Faggionato, “France lands record €15B in foreign investments as Macron hosts business summit,” Politico, 13 May 2024)
Rugby Legend Lucien Mias dies at 93
On 12 May 2024, Rugby legend Lucien Mias, who led France to the first “Five Nations” rugby championship title in 1959 died at the age of 93. Known as captain “Doctor Pack,” because of his career as a medical practitioner, began his rugby career with Narbonne. Mias made his international debut against Scotland in the 1951 Five Nations and he played another sixteen times till 1954. After a record of 17 caps (Number of international representations), his career was on hold in 1954, but he came back stronger in 1957 winning another twelve caps in the next two years. As a six-time captain, Mias helped France in the historic winning tour of South Africa in 1958 leading them to their Five Nations triumph. He also helped in their first wins at Twickenham in 1951 and Cardiff seven years later. These were among the most memorable in the history of French rugby. (“French rugby legend Lucien Mias dies, aged 93,” Le Monde, 13 May 2024)
SWEDEN
Prime Minister open to deploy nuclear weapons during wartime
On 13 May 2024, Swedish Prime Minister Ulf Kristersson said that he was open to allowing nuclear weapons on Swedish soil in wartime which has sparked criticism. Sweden abandoned two centuries of military non-alignment to join NATO this year and is expected to vote on a Defense Cooperation Agreement (DCA) with the US which will give the US access to military bases and the storage of military equipment of Sweden. Following the statement, the Swedish Peace and Arbitration Association has demanded the government give a written statement in the DCA stating Sweden would not allow nuclear weapons on its soil. The government in turn has repeatedly insisted on not having a ban as the situation of war. To them, the whole purpose of NATO membership is to ensure that the situation does not arise. (“Sweden open to hosting nuclear weapons in wartime: PM,” Alarabiay News, 13 May 2024)
THE UK
Politico reports Britain Expects A Financial Crisis In The Non-Bank Sectors
On 10 May 2024, Politico reported on Britain’s upcoming financial crisis which will affect nonbank investors such as hedge funds, pension funds, insurers, or private equity. Since the financial crisis 2008, the financial part that sits outside of banks had absorbed all the risk which in turn will affect globally also as non-banks now account for half the financial system. Bank chiefs are fearing another Liz Truss-style meltdown on the financial markets which would create problems not only in the City of London but also globally affecting thousands of people’s jobs. Due to this the Bank of England (BOE) is pushing for international cohesion to settle the issues. Another worry according to Sarah Breeden, Deputy Governor of the BoE said: “Gaps in our knowledge have meant we are largely building resilience in market-based finance in response to crises, whereas we should be looking to build resilience ahead of vulnerabilities crystallizing.” (Britain’s next financial crash is coming. This time it won’t be the banks,” Politico, 10 May 2024)
REGIONAL
Norway and Germany signed deal to develop 3SM Supersonic Strike Missile
On 13 May 2024, Kongsberg Defense and Aerospace (Norway’s defence and aerospace systems supplier) and Diehl Defense (Germany’s weapon manufacturer) with MBDA Deutschland (Germany’s missile system company) entered into a new partnership agreement to develop German and Norwegian Supersonic Strike Missile (3SM) Tyrfing. The 3SM will be a new, long-distance, maneuverable naval strike missile to be deployed along with the existing Naval Strike Missile (NSM). According to Thomas Gottschild, the managing director of MBDA Deutschland, “standoff weapons are crucial for credible deterrence and defense.” The weapon will be intended to meet future surface threats and as a joining force between both countries. (“Norway and Germany form 3SM supersonic strike missile team,” navaltechnology, 13 May 2024)
Booking.com to face market regulation under EU’s DMA
On 13 May 2024, the EU listed Booking.com, an online travel giant along with other big digital companies such as Amazon, Apple, Meta, Microsoft, Google parent Alphabet, and TikTok. This would mean the travel company would now be subject to EU’s Digital Markets Act (DMA). The act aims to balance the companies in the digital markets while ensuring EU users have more options when choosing products from web browsers and search engines. DMA also demands the companies to inform the EU ahead of the acquisition of other firms to reduce monopolies. The travel giant with more than 60’per cent’, share in the Europe market now has six months to prepare for compliance with the act. EU can also impose fines of up to ten per cent of a company’s global turnover which might increase to 20 ‘per cent’ for continued offenders. (“Booking.com to face tough new EU competition rules,” Le Monde, 13 May 2024)