Brussels, 07/11/2006 (Agence Europe) - On Tuesday 7 November Eero Heinäluoma, the Finnish minister for finance declared, “we have not succeeded in obtaining an agreement”. This legislative proposal aims to target excise duty on alcohol and intermediary products (sherry, port, sweet wine) and alcoholic drinks, in an effort to take into account the rate of inflation calculated at 31% since adoption in 1992 of the 92/84/EEC directive. Satisfied that “a majority of Member States had agreed to the proposal of the Finnish presidency”, Heinäluoma indicated that the Council would be “pursuing its examination” in an effort to include this dossier on the agenda at November's Ecofin Council.
The Finnish minister acknowledged that discussions had focused on “beer” and four Member States were opposed to the first Finnish presidency compromise proposal (EUROPE 9298). During the initial discussion Germany indicated that it could not accept another increase in indirect taxation on this widely consumed product because in January 2007 it will be increasing valued added tax by three points (from 16% to 19%). Significant changes were already introduced to indirect taxation when the Czech Republic joined the EU, a country where beer consummation is the highest in Europe and the country is also opposing the legislative proposal. Supported by Latvia and Lithuania, Germany and the Czech Republic called for an exemption on beer from rises in excise duties.
Following a brief interval in the work, the Finnish presidency presented a second compromise proposal which reflected the concerns expressed by beer producing countries. This proposal will allow for exemptions on this drink as well as specific concessions on certain intermediate products as requested by France and Cyprus. This time “seven Member States” refused our proposal and the third attempt there will be “twenty Member States” Mr Heinäluoma sarcastically explained. Sweden and Denmark are refusing this exemption on beer, while Spain and Portugal are opposed to specific measures on intermediate products.
How can an exit be found to this impasse requiring unanimity? Perhaps through a compromise proposal avoiding the multiplication of exemptions. The Netherlands and Denmark also put forward the idea of a mechanism allowing for a future automatic adjustment of excise duties on these products. The Finnish minister pointed out that there was “unanimity” on this idea but the modalities still needed to be worked out. (mb)