By Bruno Waterfield - 17th April 2006
Calls for an EU tax could be politically and economically damaging, Europe’s budget commissioner has warned.
Dalia Grybauskaite tells the Parliament Magazine that proposals to raise Brussels budget via taxation could become a new totem of anti-EU sentiment.
The Lithuanian commissioner warns that an EU tax could be as misunderstood and as unpopular as the services directive – the legislation blamed for last year’s French referendum defeat.
“We cannot allow ourselves to make the same mistake as with the services directive. We let the question become highly politicised, we frightened people. And finally, what we have is a weakened compromise. We should avoid such a future.”
“Let’s be very careful, not speculate and rush with ideas, because we risk killing them and prejudging the outcome of the talks,” she said.
Proposals to reform the “own resources” system, the mechanism by which national governments pay into EU coffers, will be part of a debate on future European financing in 2008.
Austrian leader Wolfgang Schuessel believes an EU tax should be considered as an alternative to traditional EU budget battles.
Negotiations last December saw deep divisions emerge over spending between capitals that pay more to the EU than they get back and new, poorer member states that benefit from the cash.
Grybauskaite acknowledges that discussion is needed on how to overhaul the system but cautions against passing the burden to EU citizens.
“If we talk about an EU tax, it should only be as a replacement of direct treasury payments from the governments. Not something that citizens should pay additionally,” she argues.
The commissioner is particularly concerned over Schuessel’s call to raise EU funding from a tax on travel, including international aviation.
“What we should not do is jeopardise the competitiveness of the European economy,” she said.
“For example, aviation tax – what about a real, full economic and financial impact assessment of such a measure? On any kind of EU tax in general, we need to be prudent.”
EU officials are also concerned over calls to use VAT, a consumer tax, as the primary source for European budgets.
Under such a system there are concerns that a poor countries such as Poland will end up paying more than rich EU members such as the Netherlands.
Poland’s 30 million people - compared to the 16 million Dutch - could end up footing more of the EU bill unless contributions reflect the wealth of member states – as under the current system.
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