Brussels, 10/07/2001 (Agence Europe) - The idea of introducing a "European tax" was far from arousing enthusiasm among Finance Ministers during the debate on the priorities of the Belgian Presidency, which opened the Ecofin Council on Tuesday in Brussels under the presidency of Didier Reynders. The Netherlands, Sweden, Denmark, the United Kingdom, Ireland and Spain were clearly against the idea, whereas Luxembourg, Belgium and, to a certain extent, France and Germany were more in favour.
"The last time a European tax was introduced, was at the time of the Duc d'Albe - and we had eighty years of war", said Dutch Minister Gerrit Zalm, making an ironical allusion to the war of independence against Spain, when Charles Quint had undertaken to create a tax to finance his wars at the beginning of the XVIth century. It was an allusion that obviously pleased British Gordon Brown and Irish Charlie McCreevy, who spoke of the American War of Independence.
Ministers raised questions about how suitable such a tax was from a political point of view. "The eurotax is not a priority and a majority of the European population does not want it (…). This is not a good message to be sent to citizens", stressed Mr Brown, calling on his counterparts to focus on "what counts" to ensure sustainable growth: the acceleration of structural economic reforms, the completion of telecommunications liberalisation in 2001, capital markets in 2003 and the integration of financial markets in 2004. Along the same lines, Spanish Minister Rodrigo de Rato stressed that "what the European Union needs is more growth, investment and employment, not more taxes". Bosse Ringholm, from Sweden, could not have been clearer, simply saying: "we are against it". "The eurotax is not a new idea and it cannot be said that it arouses mass enthusiasm in Sweden and the Netherlands", said Michael Dithmer, from Denmark. While stressing that France "is not opposed in principle" to the creation of a European tax, French Finance Minister Laurent Fabius also said it is not necessarily a popular measure: "I often have demonstrators below my window but I have never heard them calling for a European tax to be created", he commented.
Only Luxembourg's Finance Minister Jean-Claude Juncker unreservedly defended the eurotax project, stressing that "it is true that the mass of Europeans are reticent about the idea of new taxes. The same thing is true in the Grand Duchy regarding the lifting of the banking secret … but it is sometimes necessary to make an effort to move on". "I therefore believe that we shall reach convergence on the fact that it is not a matter of having a more burdensome taxation system but of improving the transparency of receipts and, from this, the effectiveness of Community expenditure", he insisted. "The debate should be approached with an open mind", he concluded. Although he did not specify his thoughts, Italian Minister Giulio Tremonti felt that "this is a fascinating idea and, the simple fact that we have thought about it, is a major contribution by the Belgian Presidency".
For most ministers, the debate, however, is premature and, at any rate, a proposal of European tax should not increase the general level of taxation. "Spain does not wish to propose this debate on the European tax, but if some States want to discuss it, it is clear that a eurotax should not increase the level of taxes and should respect the principle of progressiveness between the level of resources of the different Member States", noted the Spanish minister and forthcoming president of Ecofin, Rodrigo de Rato. German Minister Hans Eichel stressed that "although the introduction of a eurotax may be a reasonable measure in the long term, it should not increase the tax pressure on citizens". Portuguese Minister Guilherme d'Oliveira Martins felt that one should be "cautious and that the message sent to citizens must be positive in order to show that this is progress and not an increase in taxes".
Enlarging the debate, the Dutch and German ministers called for the questions on the budgetary cost of enlargement and the financing of the structural and agricultural policies in the context of the financial perspectives after 2006 should be tackled at the informal Ecofin meeting in Liège, on 21 and 22 September. Summarising the debate, Council President Didier Reynders noted the "determination of Member States to discuss the final consequences of enlargement". He added: "we shall see what form this takes" but did not give his view on the context of debates at the future informal Council.
Generally speaking, the ministers supported the priorities proposed by the Belgian Presidency (see EUROPE of 22 June, p.9): improved coordination of economic policies, continued work on the three chapters of the "tax package" and on the negotiating brief with third countries on savings tax, the acceleration of negotiations on the Lamfalussy package on financial services, a debate on the basis for taxation and the rates of energy tax, intensified preparations for the populations for changeover to the euro, and measures to fight against money laundering.
Didier Reynders also "noted" the wishes expressed by his counterparts, who insisted on three aspects of changeover to the euro: 1) improved legislation on cross-border payments; 2) practical preparation of citizens; 3) the euro's external representation. He also stressed the willingness of ministers to make progress on the issue of the European Company statute and to pursue the debate on energy tax. Finally, he noted the wish to make progress with the European Parliament concerning the Lamfalussy package.