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A New Tax In The Air?
The EU's new Austrian presidency plans to propose a tax on air travel and short-term financial transactions to raise EU funds in future.
Austrian Chancellor Wolfgang Schüsse claims that such a tax would signal the end of the regular budget squabbles that derailed both the British and Luxembourg presidencies. The Independent reports that the previous EU commission was also keen on an EU-wide tax to replace budget negotiations.
Schüsse is expected to stop short of detailed proposals, but has pledged to investigate means by which an EU tax could be imposed "with the least pain." He hopes that the proposals will be examined at the EU budget review Tony Blair "won" for 2008.
A spokeman for Blair told the EU Observer that London has "strong reservations" about EU tax plans. Graham Brady, the Conservative's Europe spokesman, went further: "EU taxes are unacceptable to the British people," he said.
The Independent reports that Britain and France killed off the last Commission's tax plans. However, the French appear to have since warmed to the idea. "We should have an open mind in the discussion on how the future undertakings of the EU can be met. This might include a new European tax," one insider told the EU Observer. The Observer also reports that Poland might warm to such a tax.
The Austrian proposals were revealed as MEPs rejected the British budget agreement, secured after much wailing and gnashing of teeth in December. MEPs called for more flexibility on how the cash would be spent and, predictably, more money. An additional statement from MEPs claimed that the 2007-2013 proposal "does not guarantee a budget enhancing prosperity, competitiveness, solidarity, cohesion and security."
EURSOC previously argued that the EU could have as much prosperity, competitiveness, solidarity, cohesion and security as it liked if it was to abolish the Common Agricultural Policy's payouts, which account for more than 40 percent of the total budget.
In any case, the EU Observer reports that the EU's leading six paymasters - Germany, France, the UK, Austria, the Netherlands and Sweden - expected such a response from MEPs whatever the deal agreed by governments. Hence the estimated €1 billion "appeasement fund" they are said to have set aside in January 2005 to pay off MEPs in the inevitable negotiations.
MEPs' fondness for more money for the EU and support for an EU-wide tax are only to be expected. More money means more power, but wresting budget negotiations from quarrelling governments is more sinister: It's a long-held dream of Eurofanatics to grant the EU tax-raising powers.
As such, it's less the creeping federalism that sceptics have become accustomed to, more like a power grab.
And it's almost impossible to imagine the British buying it. EURSOC already warned that the response to a Euro Tax would make the Poll Tax protests look like a Sunday School Outing - we're thinking more Boston Tea Party. Besides, a tax on financial transactions would hit London particularly hard, which might explain France's enthusiasm for such a move. (It would also hit budget airlines hard, assisting state champions.)
Graham Brady's right again:
"What is really absurd is that the new EU presidency is wasting time discussing a further extension of EU powers to raising taxes instead of focusing on the real priority of making Europe more flexible, less regulated and better able to compete in an increasingly challenging global marketplace."
