EU

Luxembourg’s financial sector has faced a wave of tax avoidance legislation in recent years. But the impact of the earlier measures is likely to pale in comparison to the EU’s latest – the third Anti-Tax Avoidance Directive, known as the “Unshell directive”. Luxembourg tax specialists are anxious about its potential impact on the widespread use of shell companies, often known as ‘special purpose vehicles’, in Luxembourg company structures. 

Luxembourg’s permissive environment for inducements and an acceptance of non-independent investment advice will make a good test case for the EU’s upcoming retail investment strategy. A fight is brewing over “kickbacks” as the European Commission finalises its effort to encourage Europeans to increase the level of their assets placed in investments.

German judges handed down an important verdict this week: EU treaties are no obstacle to shared debt in the union. The ruling comes shortly after the European Commission called for new joint injections into the economy. “As an investor I would carefully reconsider my bond portfolio,” one critic warns.

On Tuesday, the German constitutional court in Karlsruhe ruled that “exceptional” EU loans to overcome problems caused by the Covid-19 pandemic do not violate European treaties.

To preserve financial stability , EU supervisory agencies for energy markets and for financial markets on Tuesday said they will intensify their cooperation and improve their exchange of information, seeking to avoid potential market abuse in Europe’s energy and derivatives markets.

Switzerland, long a place for Russian oligarchs to park their money, announced Monday it would set aside its long-standing and deeply-rooted tradition of neutrality in order to freeze Russian financial assets in the country, as the fast-moving international reaction to Russia’s invasion of Ukraine continues. In so doing, it joined the European Union and a growing list of countries attempting to penalise Russia, as Luxembourg drew its financial sector’s attention to several EU sanctions measures.

A solution must be found at the European level to deal with the costs of extreme health risks such as a pandemic. This can be done by launching bond-like products that can be sold to institutional investors.