EU Employers' Leader Wants To Ditch Energy Tax

by Ulrika Lomas, Tax-News.com, Brussels

19 March 2002

After European leaders reached a compromise deal over energy liberalisation and taxation in Barcelona at the weekend, the EU's top business representative said that the proposed energy tax should be ditched.

Daniel Cloquet, director for industrial affairs at Unice, the Union of Industrial and Employers' Confederations in Europe, said: "The original commission proposals would be detrimental for energy intensive sectors and they do not protect international competitiveness."

Cloquet said that although EU leaders want to establish a way to increase the taxes without harming competition, "it will be practically impossible to provide real guarantees for competitiveness."

Although EU leaders at the summit in Barcelona said they do not expect to see the proposed energy tax directive implemented until 2004, they set a target of end-2002 for agreement on the plan, to go in parallel with the deal to open energy markets.

The goal for the summit had been to agree on full liberalisation of the energy market for both business and household users, of the electricity market in 2003 and of gas in 2004. This goal was blocked by the two French presidential contenders, President Jacques Chirac and prime minister Lionel Jospin, who feared a trade union backlash during the current election campaign.

Instead, a schedule was agreed for liberalisation of business use, but further discussions on household use were pushed off into 2003. A decision on "further measures" is promised before next year's spring summit.

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