European Economic Governance

European Economic Governance

Following the financial crisis, the EU has set up strict procedures to coordinate national economic policies and control economic imbalances by individual member states by setting up a yearly cycle of economic policy coordination called the “European Semester”. Each year the European Commission undertakes a detailed analysis of EU Member States’ programmes covering three blocks of economic policy coordination concerning structural reforms, fiscal policies and prevention of excessive macroeconomic imbalances.  

 

The European Semester looks at every aspect of economic activity covered by Governmental activity. Hence, depending on the member state, it touches upon several real estate related topics such as:

   
  • A movement away from income-based taxation to other forms of taxation such as property tax;
  • The restructuring of property taxation;
  • Updating property valuation as a tax base;
  • Reviewing reduced VAT rates, potentially affecting taxation on items such as the repair and renovation of housing;
  • Rationalising and/or liberalising rent regulation;
  • Reducing volatile interest payments on mortgage loans;
  • Phasing out tax deductibility of interest payments on mortgages;
  • Rationalising planning and zoning control;
  • Reducing obstacles to cross-border construction and real estate services;
  • Increased competition within the construction sector;
  • Increased energy efficiency in buildings;
  • Reducing and monitoring distribution and retail costs in the energy sector.