EU tax ‘absurd’

Austrian EU presidency calls for a European tax are economically ill-advised and “politically” dangerous, said a senior Brussels official on Tuesday.

Last week Austrian leader Wolfgang Schuessel took up the idea of direct consumer taxes to fill EU coffers as an alternative to traditional budget battles over national contributions.

But the idea has bombed in Brussels and been branded “politically dangerous and premature” by a European commission official.

Officials and many national diplomats are dismayed at the impact proposals for a European tax could have after French and Dutch referendum rejections of the EU constitution.

“In some EU countries a tax will be seen as a European diktat,” said the official during off-the-record exchanges with journalists.

“Half the member states are totally opposed. Especially in new member states it would be treated as the dictatorship of Brussels.”

Top officials are deeply concerned that “naïve” proposals to tax voters for the costs of Europe could scupper delicate negotiations on the future of the constitution.

“Considering the current growing Euroscepticism in Europe, to introduce such an idea now would be absurd… Talk of an EU tax could kill the constitution for good,” said the source.

Schuessel’s argument that an EU tax could be directly raised from a levy on air travel is economically, as well as politically, ill-advised, the official said.

“You want the US to fly and not the Europeans?,” asked the source. “You must carry out a impact assessment on a global scale because if you must realise the impact in terms of international competition.”

The comments represent a U-turn in Brussels, EU taxes were mooted by the European commission in original budget options’ for 2007 to 2013.

Back in July 2004 the commission proposed “a main fiscal resource based on either energy, VAT or corporate income tax” by 2014.

In the heady days before EU constitution rejections in France and the Netherlands, the argument then ran that direct taxes would bring Brussels closer to voters.

“The proposal reflects the nature of the EU as a union of member states and citizens by clarifying the link between the taxpayer and the EU budget,” the commission said on July 14 2004.

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