The European Commission is leaning more and more towards taxation as a potential factor for budget consolidation and economic growth and is introducing initiatives to this effect. Denmark, however, is cautious of making this poisoned chalice a priority for its Presidency and certainly does not intend to take any great risks. It will definitely be more reactive than proactive.

Copenhagen will do its utmost to ensure progress on technical aspects of three very politically sensitive subjects: revision of the directive on energy taxation, plans to introduce a common consolidated corporate tax base (CCCTB) and a financial transaction tax (FTT).

It will focus in particular on the first of these three. Denmark has always been somewhat reticent about the Commission's CCCTB proposal, fearing that it will lose about a third of its fiscal revenue from businesses. It also feels that unless the FTT is implemented internationally, it will threaten the EU's competitiveness.

This view on the financial transaction tax is shared by the majority of EU member states, prompting the United Kingdom, in November 2011, to urge finance ministers to hold a quick "indicative" vote on the subject in the hope of burying the idea. Unfortunately for the UK, both France and Germany support the project wholeheartedly.

It will not be an easy situation for Copenhagen to manage. The same is true for the savings tax. Revision of the existing directive and the agreements the EU has concluded with Switzerland, Liechtenstein, Andorra, San Marino and Monaco are being blocked by Luxembourg. The Grand Duchy is demanding to be put on an equal footing with Switzerland, which has signed bilateral conventions (known as Rubik') with Germany and the United Kingdom that maintain Switzerland's banking secrecy, although the Commission is questioning the legality of these agreements.

This obstacle is placing the European Union in a weak position with the United States just as Brussels is trying to persuade Washington to relax...

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