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Tuesday, August 10, 2010

EU tax: the reactions from around Europe

EU Commissioner Lewandowski hasn't exactly hit a home run with his comments about the Commission's forthcoming proposals for an EU tax.

The idea was outright rejected by the German government, which pointed out that its coalition agreement stated: “We reject an EU-tax or the involvement of the EU in national tax and duty collection.” A spokesperson from the German ministry of finance told today’s FTD that “Nothing has changed in this stance.”

As expected, the British government also gave the idea the cold shoulder, with Treasury Minister Lord Sassoon saying that the British Government

“is opposed to direct taxes financing the EU budget. The UK believes that taxation is a matter for member states to determine at a national level and would have a veto over any plans for such taxes.”

Also France, which in the past has advocated fiscal centralisation and an EU tax, doesn't seem particularly impressed. “We judge this idea of a European tax perfectly ill-timed,” said France's junior minister for Europe, Pierre Lellouche. “Any extra tax is currently unwelcome. It is much more the time for the member states and also European institutions to make savings.”

Okay, it's not the idea of transferring fiscal sovereignty but the timing that rubs Monsieur Lellouche the wrong way, but still.

But Lewandowski does have some supporters. A spokesperson for the Austrian Minister of Finance Josef Pröll, for exampe, tells Die Presse that

“if we use [a financial transaction tax] as a source of finance for the EU, it eases the burden for net contributors. Whether the financial transaction tax goes into the domestic budget or is used for the refinancing of the EU or a small amount is transferred to the EU is not that important”.

Having previously confirmed his commitment to a financial transaction tax his support was somewhat expected. Spanish Prime Minister Zapatero also said he would consider a concrete proposal from the Commission “with interest” and “maximum attention,” if “the idea behind it is strengthening the European Union,” reports EFE.

Media reactions haven't been overly positive either (at least from the Big Three). Einar Koch, Chief Correspondent of German tabloid Bild, exclaims "EU tax, no thank you!” He argues that “The EU desperately needs structural reforms in its expenditures instead of new sources of revenue.” Another attack comes from Dutch MEP Derk-Jan Eppink who says that the proposals should be fought “with fire and sword,” according to Standaard.

"More money from less citizens?" asks Clemens Wergin in Die Welt. He points to Europe’s shrinking population and the apparent failure in Brussels “to understand [the] basic correlation between demographic trends and governmental expenditures.”

A commentary in Focus at last finds something positive in a potential direct tax. Giving the European Parliament a say in tax jurisdiction would force MEPs to justify the added burden of additional expenditure to their constituencies. This could actually cause the parliament to take its role of budgetary oversight seriously, instead of constantly propose spending increases to fund their own pet projects. An interesting thought.

Judging from these reactions, Brussels latest attempt at grabbing fiscal powers will last about as long as England in the World Cup. But this being EU politics, we doubt the idea will go away so quickly. As we've noted before, there's a dangerous temptation for the net contributing member states here, which Lewandowski is trying to exploit and test (with limited success so far).

Brussels specialises in repackaging and rebranding ideas (but with the substance unchanged), in order to overcome opposition.

Let's wait and see until Lewandowski has actually tabled his proposals. The outcome is still far from clear.


Anonymous said...

With the Commission having failed to produce audited accounts for 13 years, the audacity and lack of imagination on the part of EU officials in bringing back the debate about what it costs us all, is staggering.

Anon 2 said...

As one of the millions of UK residents who want our countries to leave the EU as quickly as possible, I think allowing a direct tax from the corrupt bureaucrats of Brussels would make it harder to do so. And, as Anon has already said how very dare they since they've been unable to provide audited accounts fo the last 13 years?