Tax Harmonisation Key Issue For Swedes As Referendum Nears

by Ulrika Lomas, Tax-News.com, Brussels

11 August 2003

The debate in Sweden concerning the country's adoption of the euro is focusing predominantly on one issue that both sides see as key to influencing next month's referendum result - the thorny subject of tax harmonisation.

Many in the mainstream political parties are staking their reputations and political futures on the assumption that the euro will bring greater prosperity to the country, whilst arguing that Sweden will retain control over its domestic taxation policies.

However, whilst those politicians who take the opposite line - fearing that the nation is about to be sucked into a federal super-state with control over much of domestic policy ceded to Brussels - are very much in the minority, they would appear to have the support of the majority of Swedish voters.

"Joint EU taxes are in the pipeline. It is only a matter of time," Per Gahrton, a European Parliament member for Sweden's anti-euro Green Party told reporters recently, adding that: "To hold together, a currency union must have quite strong centralised steering functions such as harmonised taxes, a budget and an economic government."

Meanwhile, Gunnar Lund, minister for international economic affairs, has dismissed Gahrton's argument as "not credible", recalling the narrow 'yes' vote in the European referendum in 1994, when the opposition warned of mass unemployment.

"He said at that time too that we will get common taxes immediately, like a letter in the mail. Has that happened? The answer is 'no'. Will it happen? The answer is 'no'," Lund observed in a Reuters report.

"It will be easier for us to finance our public sector, to maintain our welfare system if we join rather than the other way around," he concluded.

However, the government's argument does not appear to be winning over the Swedish public according to the latest Gallup poll, which puts the 'no' supporters 13% ahead of those in favour of the euro.

Recommended