EU Commission President Wants Taxation Power For Brussels

by Ulrika Lomas, Tax-News.com, Brussels

30 May 2001

Echoing recent suggestions made by Belgian Finance Minister Didier Reynolds, EU Commission President Romano Prodi yesterday said he was in favour of a European tax to finance the EU's budget, which is currently paid for by a portion of VAT collected nationally.

Mr Prodi was addressing the Institut d'Etudes Politiques in Paris (where better to talk about new taxes?). "Financial reforms must be on the agenda whenever there is any attempt to reflect on the future of the EU," he said.

The EU President said a European tax could be a good replacement for the current system of national contributions to the EU budget, which he said generated 'endless conflicts between member states.'

Mr Prodi said the time had come to build a political Europe and modernise the community method of decision making by which the Commission uses its powers to propose common policies which become law after being amended and agreed by the council and parliament. This, he said, was far superior to the intergovernmental method of reaching decisions as practiced by the EU in foreign policy.

This all sounds like a return to the French/German push for more harmonisation and centralisation which failed so spectacularly at the Nice summit last December, and which is sure to be reawoken during the Belgian presidency about to begin. But it is anathema to euro-sceptics and in particular to the British.

Especially during the British election campaign Mr Prodi can't expect any support from the UK's warring politicians; but it's a fact that enlargement (which is supported by all British parties) is scarcely imaginable without some fairly radical changes to the EU's convoluted and constipated legislative process. In particular, an extension of majority voting is unavoidable.

Recommended