EC President Urges Common Tax Rules

by Ulrika Lomas, Tax-News.com, Brussels

15 March 2002

Speaking ahead of today's summit in Barcelona, European Commission President Romano Prodi stressed the need for a coherent European code of economic conduct, and again raised the spectre of tax harmonisation throughout the European Union.

Speaking at a press conference earlier this week, Mr Prodi argued that the current Growth and Stability Pact is essentially a short term measure, and that in the light of the growing interdependence between EU member states, tougher rules need to be introduced in order to prevent countries from running excessive deficits, as in the 1980s.

'Experience has shown that mistaken policies are usually conducted in good times, when the economy is expanding,' the EC chief told reporters. 'We find at that time, member states fritter away the leeway that they need to cater for leaner times when there is either reduced growth or actually recession.'

Mr Prodi also spoke of the possibility of tax harmonisation within the European Union, an issue which was recently raised by German Chancellor Gerhard Schroder, and which has provoked some angry reactions, in particular from the United Kingdom and Ireland.

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