PositionBrief Article

The notion of a European tax is nothing new. It was floated unsuccessfully by France in 1992 and resurrected by the Belgian Presidency of the EU in July 2001, though it was subsequently abandoned owing to the reservations expressed by the EcoFin Council. The College is divided over this project, championed by Romano Prodi as a means of guaranteeing funding for common policies after EU enlargement. Whilst Commissioners Michaele Schreyer (Budget), Michel Barnier (Regional Policies and Institutions) and Pascal Lamy (External Trade) are generally in favour of a European tax, others, including Frits Bolkestein (Internal Market and Taxation) are firmly against. The Commission is expected to settle its final position in the coming months.The arguments in favour of a European tax fall into three categories. First and foremost, enhancing the involvement of citizens in the EU, through their direct participation in financing common policies. Secondly, expanding the responsibilities of the European Parliament, which currently enjoys co-decision powers with the Council over spending, but has no influence over receipts. Finally, the project's backers consider that a European tax would reopen the issue of the British "rebate" in the calculation of its contribution to the Community budget. The "civil visibility" of this tax might permit London to sell the abandonment of its rebate - the maintenance of which appears difficult to accept in the perspective of an enlarged Union. Whereas the United Kingdom's contribution to the funding of pre-accession programmes, still considered as an aid programme for third countries and therefore subject to specific budgetary rules, is about 18% and reflects the country's GDP, this figure would be only 8% once...

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