Campaigner Says UK Euro Entry Would Force Tax Harmonisation

by Jason Gorringe, Tax-News.com, London

01 April 2002

In a letter to the Financial Times on Thursday, prominent anti-euro campaigner, George Eustice, warned that tax harmonisation would become inevitable if Britain joins the eurozone.

Responding to a March 26 article entitled 'The myth of the eurotax', in which Edward Troup claimed that the European tax harmonisation proposal has 'its occasional maverick supporter', Mr Eustice observed that in March alone, French President Jacques Chirac, German Chancellor Gerhard Schroder, French Prime Minister Lionel Jospin, and European Union Trade Commissioner Pascal Lamy have all announced their support for EU tax harmonisation.

'Are they the mavericks whose views are to be ignored?' he asked.

In his letter, the 'no' Campaign Director for lobbying group Business For Sterling suggested that were Britain to enter the euro, it would find it more difficult to fight against European tax harmonisation, as the majority of eurozone members agree with the proposals.

'While we are outside the euro we can resist this pressure but if we were to join the euro it would be much more difficult,' he argued. 'In the event of a crisis, we would be open to the accusation that we were undermining confidence in the euro by opposing harmonisation of tax policies.'

Mr Eustice also pointed out that within the eurozone, a greater degree of fiscal harmonisation is indeed necessary in order to succeed, as the region lacks the labour mobility present in the United States, and will need to develop effective measures to redistribute funds if it is to avoid creating mass regional unemployment.

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