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France’s Finance Minister Bruno Le Maire sent a clear message to the U.S. and the rest of the world on Thursday when the country passed a 3% tax on the digital revenues of big tech companies: “France decides its own tax rules.”

By choosing to go-it-alone, France set the stage for a country-by-country approach toward taxation of tech companies in Europe. Hours after the French vote, the U.K. released its own draft proposal for a 2% digital services tax.

The national proposals come after an EU-wide effort to pass a digital tax on corporations failed last year, thanks to resistance from countries like Ireland and the Netherlands.

Some experts fear France’s unilateral approach with the digital tax will backfire, ultimately harming consumers and smaller businesses it aims to protect.

“This tax will completely miss its objective,” said Aleksandra Bal, an EU tax expert at Vertex, a tax software provider, in an interview Friday.

France’s tax is specifically focused on roughly 30 companies that generate at least 750 million euros ($845 million) in annual revenues from digital services, including 25 million ($28 million) from within France. Le Maire argues the measure is necessary to make internet giants pay their fair share of taxes.

Unlike a VAT tax, Vertex’s Bal said the digital services tax does not aim to place the burden on consumers. Instead, it is a targeted measure on three types of “digital activities:” online advertising, online intermediary activities and the sale of user data. In other words, the tax is designed for big tech firms like Facebook, Google and Amazon.

But a study published earlier this year by Deloitte and advisory firm Taj found only 5% of the digital tax’s burden will fall on the large internet companies it aims to target. Instead, the study said consumers will absorb 55% of the cost and 40% will be borne by businesses that use digital platforms. The study estimated that Amazon, for example, might increase the commission it charges merchants on the platform, which could in turn result in higher prices for shoppers.

Industry group techUK warned of similar consequences from the U.K.’s proposed 2% tax on digital services in a statement Thursday.

“At present, the tax could very likely lead to some bizarre outcomes, including increasing costs being passed onto consumers, dis-incentivizing investment in R&D and reducing competition,” techUK’s associate director for policy Giles Derrington said.

On its own, a 3% tax such as France’s would hardly dent the revenues of big tech companies. France’s finance ministry aims to raise up to 500 million euros ($562 million) annually from the measure by 2020.

For comparison, Apple raked in more than $13 billion in sales in Europe in the first-quarter of the year, while Facebook’s European revenues were $3.65 billion during that period.

Some experts said the costs of compliance could add up for tech firms, especially if more EU countries push through their own national taxes. Tech companies like Amazon disputed France’s tax on Thursday arguing for a multilateral approach instead. In a statement announcing an investigation into France’s tax, the U.S. Trade Representative said the measure “unfairly targets American companies.”

France argues the digital tax is a temporary measure until a broader agreement among countries is reached. The Organization for Economic Cooperation and Development (OECD) is currently reviewing steps to modernize the tax system for the digital economy but has said it won’t reach a conclusion until 2020. The French tax is expected to be enacted within 21 days and will be applied retroactively from January 2019.

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Europe is at odds over who will replace Christine Lagarde at the IMF

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International Monetary Fund (IMF) managing director Christine Lagarde speaks during a press conference in Tokyo on October 4, 2018.

Kazuhiro Nogi | AFP | Getty Images

European officials are still scratching their heads over Christine Lagarde’s successor at the International Monetary Fund (IMF), according to several people with knowledge of the discussions, with no standout candidate for the role.

Lagarde is due to start her new job as president of the European Central Bank (ECB) in November, leaving the IMF’s chair empty. In Europe, EU member states agree that the next IMF managing director needs to be from the continent — but they’re struggling to rally behind one particular name.

“The truth is that there is no readily available tried and tested European all-rounder,” a European minister, who did not want to be named due to the sensitive nature of the talks, told CNBC.

There is no official shortlist of candidates, but many governments of EU nations have put forward a name to take the top job. Some of the non-official candidates are:

  • Jeroen Dijsselbloem, former Dutch finance minister and president of the Eurogroup (which brings together the 19-euro zone finance ministers).
  • Mario Centeno, the Portuguese finance minister and currently Eurogroup chief.
  • Nadia Calvino, the Spanish finance minister.
  • Olli Rehn, central bank governor of Finland and former European commissioner for the euro.
  • Mark Carney, the current governor of the Bank of England — a Canadian citizen who also has Irish and English passports.
  • Kristalina Georgieva, from Bulgaria, who is currently serving as chief executive of the World Bank.
  • Mario Draghi, the outgoing ECB president.

According to two other European officials, who also preferred to remain anonymous, none of the candidates have the right profile at this stage. Some names also don’t have enough experience or they are not liked by certain governments due to their political affiliation, their past comments or their background, the officials told CNBC. Since the IMF’s formation back in 1945, the managing director has always been from Europe.

There is also an age restriction to deal with. The IMF’s rules state that managing directors must be under 65 years of age when appointed and cannot serve beyond their 70th birthday. As such, the chances of certain candidates, such as Kristalina Georgieva, become much smaller.

“If (the) age limit is adapted to today’s realities, there is Georgieva and Draghi,” the European minister told CNBC.

France, who’s chairing the discussions across the different EU capitals, is reportedly looking at ways to change the laws. However, it is unclear whether that idea would be approved inside the IMF.

A source within the French government told CNBC that Paris “does not have a preferred candidate and will play its coordination role impartially.” Meanwhile, a separate EU official confirmed to CNBC that the aim is to have an agreement by the end of the month.

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EU has 35 billion euro list ready if US hits EU cars: EU trade chief

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European Commissioner Cecilia Malmstrom holds a news conference in Brussels, Belgium March 7, 2018.

Eric Vidal | Reuters

The European Union would retaliate with extra duties on 35 billion euros ($39.1 billion) worth of U.S. goods if Washington went ahead with tariffs on EU cars, the bloc’s trade chief said on Tuesday.

“We will not accept any managed trade, quotas or voluntary export restraints and, if there were to be tariffs, we would have a rebalancing list,” European Trade Commissioner Cecilia Malmstrom told a committee of the European Parliament.

“It is already basically prepared, worth 35 billion euros. I do hope we do not have to use that one,” she continued.

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GE reveals new parts for the ‘world’s largest offshore wind turbine’

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GE Renewable Energy, a subsidiary of General Electric based in Paris, revealed “the first manufactured components” for its gigantic Haliade-X 12 megawatt (MW) offshore wind turbine.

On Monday, the firm displayed the first nacelle for the turbine, which will now be shipped from Saint-Nazaire in France to Rotterdam-Maasvlakte in the Netherlands. A nacelle sits directly behind a turbine’s blades and is a shell-like structure that contains crucial pieces of kit. These include the turbine’s gearbox, controller, generator and brake.

GE Renewable Energy said that a prototype of the Haliade-X 12 MW would be installed onshore in the Netherlands in order to “simplify access for testing.” Another nacelle is being assembled with a view to testing it in “actual operational conditions” at a site in the U.K.

John Lavelle, the CEO of GE Renewable Energy Offshore Wind, said the firm was “on track to start commercializing this new product very shortly.”

As technology develops, the size of wind turbines is increasing. In September 2018, MHI Vestas Offshore Wind, a major player in the sector, launched the first commercially available double digit turbine, the V164-10.0 MW. The turbine has 80-meter long blades which weigh 35 tons each, and a tip height of around 187 meters.

The scale of GE Renewable Energy’s Haliade-X 12 MW turbine is also considerable. It will have a capacity of 12 megawatts, a height of 260 meters and a blade length of 107 meters. The turbine will generate 67 gigawatt hours of gross annual energy. The company has repeatedly described it as “the world’s largest offshore wind turbine.”

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