EU paralyzes USA Google tax project post G20 agreement - The EU gives in to the US and paralyzes its Google tax project after the G20 agreement for a global minimum tax for multinationals.

Finally, the European Union has yielded to US pressure and officially announced on Monday the stoppage of its project to apply a tax on digital platforms, known as the European Google tax, a few days after the agreement within the G20 to apply a global minimum rate of 15% to multinationals to avoid tax avoidance.

"The success of this process will require a final push from all sides, and the European Commission is committed to focusing on this effort. That is why we have decided to stop our work on a digital tax proposal", said a community spokesman in statements collected by Radio France International, which highlights that the European Google tax, with which Brussels sought to provoke a global agreement regarding digital taxation, has been the target of criticism from Washington.

EU paralyzes USA Google tax project post G20 agreement

The european project for taxing the digital platforms had already been delayed to facilitate negotiation in the G20 for the implementation of the minimum overall rate of 15% to multinationals, thereby supporting the proposal for a global tax of companies that reached in June, the G7 and the Organization for Economic Cooperation and Development (OECD), and has received the backing of the International Monetary Fund (IMF) and from 130 countries, representing 90% of global GDP.

In fact, the agreement reached this weekend by the G20 states that countries should dismantle digital taxes that the US considers discriminatory, as the secretary of the US Treasury, Janet Yellen, reminded European representatives this past Sunday, according to La Libre Belgique, which highlights that the EU had this measure to finance part of its coronavirus recovery funds.

EU paralyzes USA Google tax project post G20 agreement

In addition, the EU decision was announced coinciding with the meeting between Yellen and the finance ministers of the 27, in which the US representative was expected to reiterate her demand that the Community tax project Google be paralyzed, which Washington has repeatedly assured that it violates free competition and would harm global tax agreements.

After meeting with EU ministers, Yellen is planning bilateral meetings with the presidents of the European Central Bank (ECB), Christine Lagarde, and the European Commission, Ursula von der Leyen, as well as with the EC vice-president in charge of trade, Valdis Dombrovskis, and with the Community vice-president in charge of competition and digital affairs, Margrethe Vestager.

EU paralyzes USA Google tax project post G20 agreement

In any case, the Brussels decision is attributed to Community attempts to facilitate the approval of the global minimum rate of companies approved this weekend preliminarily by the G20, but maintaining the warning that the European digital rate will resume if this international measure does not go ahead, as the spokespersons of the European Commission have assured in their press conference at noon.

EU paralyzes USA Google tax project post G20 agreement

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Global chip shortage will keep car rental rates high, according to Europcar

The shortage of semiconductors affects more industries than one could imagine.

The global crisis in chip production has led to a notable shortage of new vehicles. Manufacturers now prioritize retail sales and other channels over rental car suppliers, who tend to buy wholesale at lower prices.

Therefore, until this lack of chips is resolved, the increase in the price of car rental is likely to continue, according to Caroline Parot, director of Europcar.

According to Parot, tariffs had risen because suppliers could not get enough vehicles to meet the demand of tourists. In some popular destinations, the price is even 2 or 3 times higher than usual.

"We can't serve everyone we want because there aren't enough cars," says Parot in an interview for the Financial Times. "People are looking forward to traveling. If you look at the US, there are enough hotels and enough flights, but the capacity of the cars has changed," he says.

This increase in tariffs contributed to inflation in the North American country reaching its highest level last month since 2008, according to the same newspaper.

On the other hand, the increase in domestic travel due to the constant changes in mobility restrictions in many European countries has caused the rental industry, like much of the leisure and tourism sector, to be further harmed.

"Every time a corridor is opened, the reserves skyrocket and fill in 24 hours, but then, if it is canceled, everyone leaves," says Parot, who calls for more coordination between the different governments.

The end customer is also affected by increases in operating costs, such as the need to ship cars across Europe's borders on short notice and the high costs involved, according to the directive.

The automotive sector is not clear when the chip crisis will end, as most manufacturers expect disruptions to occur until 2022.

Europcar does not expect to reach pre-crisis demand levels until travel between Europe, the United States and Asia resumes, which is expected by 2023.

Last year, Europcar suffered a 45% decrease in demand and they estimate revenues in 2021 higher than in 2020, although they will not come close to those in 2019 due to the impact of the delta variant, according to Parot.