Paschal Donohoe said there would have to be changes to the tax model at a global and corporate level and that he looked forward to examining a proposal from the European Commission expected early next year.

Mr Donohoe made his remarks at a press conference in Berlin where he is chaired an Informal Meeting of Ministers for Economic and Financial Affairs in his new role as President of the Eurogroup.

The press conference was also attended by ECB President Christine Lagarde, the European Economy Commissioner, Paolo Gentiloni and the Managing Director of the European Stability Mechanism, Klaus Regling.

The press conference was also told that banking union was discussed by the Eurogroup as was the continuing suspension of the Stability and Growth Pact rules.

Commissioner Gentiloni said a review of the rules had been frozen during the Covid-19 crisis but would be revamped at the end of the year.

No decision has been taken on when to suspend the so-called “general escape clause” which has suspended the budgetary rules permitting member states to break spending limits to tackle the impact of the Covid pandemic.

ECB President Lagarde said she agreed with the views put forward in a speech from her ECB colleague Isabel Schnabel and that the rules need to be ‘simpler, less obscure and more transparent for people.’

Mr Donohoe also said that Britain must respect its commitments in the withdrawal treaty it signed with the European Union if it wants to have an agreement on future trade relations with the bloc.

In one of the most extraordinary turns since the 2016 Brexit referendum, Britain explicitly said this week that it plans to break international law by breaching parts of the Withdrawal Agreement treaty it signed in January.

This plunged talks on a future trade relationship between the EU and Britain into crisis less than four months before the UK is due to leave the European Union at the end of a transition period.

“As the UK looks to what kind of future trade relationship it wants with the European Union, a prerequisite for that is honouring agreements that are already in place,” Finance Minister Pascal Donohoe said.

He made his comments to reporters before the euro zone ministers’ talks in Berlin today.

European Economy Commissioner Paolo Gentiloni, Eurogroup President Paschal Donohoe, ECB President Christine Lagarde and European Stability Mechanism Managing Director Klaus Regling in Berlin today

The European Commission asked Britain yesterday to drop by the end of September the parts of a planned bill that would break the treaty with the EU.

“It is imperative that the government of the United Kingdom respond back to the call from the Commission … this is a prerequisite to what any future relationship could look like,” Mr Donohoe said.

German Finance Minister Olaf Scholz, also speaking to reporters, said the EU would be open to a deal with Britain until the “last moment”, but Britain had to respect what it had agreed to.

“Treaties have to be respected – anyone knows that. My view on the trade discussions is the following: You have to do it up to the last moment, but you have to be very clear,” Scholz said.

The bill Britain wants to pass would override provisions in the withdrawal treaty meant to ensure Britain would not give companies exporting to the EU an unfair advantage by subsidising them. The EU is sensitive to keeping competition with Britain fair after Brexit.

“We will not accept anything that could jeopardise or weaken the single European market,” French Finance Minister Bruno Le Maire said.

Meanwhile, ECB President Christine Lagarde said today that Europe’s recovery from a deep recession is incomplete and uneven so there is no room for complacency by governments or the European Central Bank.

“This current moment is coined by this uneven, incomplete and asymmetric recovery that we have observed in the third quarter after a very catastrophic second quarter,” Lagarde said after meeting European Union finance officials.

“No complacency – our accommodative monetary policy needs the support of fiscal policy, and none of us can afford complacency in the present time,” she added.

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