(September 13, 2015)

As we reported earlier, on September 11 and September 12, 2015 an EU ECOFIN meeting took place. After the meeting an Eurogroup statement was published. In the Statement it is stated that following their agreement in September 2014 on common principles guiding euro area Member States' reforms to reduce the tax wedge on labour, the Eurogroup has discussed benchmarking as a tool to further inform and support reforms in this area.

It is furthermore stated that the Eurogroup considers benchmarking to be a useful tool for highlighting the possible need and scope for reform in this field in individual Member States and in the euro area as a whole. It is also stated that the Eurogroup has agreed to benchmark euro area Member States' tax burden on labour against the GDP-weighted EU average, relying in the first instance on indicators measuring the tax wedge on labour for a single worker at average wage and a single worker at low wage. According to the statement, the Eurogroup will also relate this to the OECD average for purposes of broader comparability. The Eurogroup furthermore stated that the benchmark fulfils a number of criteria which should be met for a benchmark to be effective. It is simple, measurable and under the control of policy makers.

Click here to be forwarded to the text of the statement as available on the website of the European Council/Council of the European Union.

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