Roman Prodi - former EU Commission PresidentMany of the top figures in the EU have already called for tax harmonisation. By harmonise, of course, they mean making the taxes of other states such as Ireland, higher.
Here are few select examples:
The spectre of increased corporation tax was most famously raised by ex-German Finance Minister Oskar Lafontaine's proposal to "harmonise" taxes in Europe.
Mr Lafontaine is believed to have wanted minimum rates of corporation tax in all EU countries.
On Dec 1st 1998 he said "It is my personal view that we eventually must go to qualified majority voting on the sensitive issue of taxes."
Pressure from politicians in 2002 to increase Irish Rates of Tax,
ie. EU tax harmonisation.
Lionel Jospin, French Prime Minister: “I propose, in terms of corporate tax, that the tax bases should be harmonised and that a minimum rate should be fixed. This would be the first step towards a European tax…furthermore, I propose that, Internal Market should be made by QMV and not by unanimity. The same should be the case for social harmonisation” (Je m’engage, Jospin’s election manifesto, 22 March 2002).
Lionel Jospin, French Prime Minister on 28 May 2001, presented his vision of the future of the European Union. Included was the startling assertion (paraphrasing his words) that ‘ultimately, the corporate tax system as a whole will have to be harmonised across the EU to avoid tax dumping and the practice of certain Member States of using unfair tax competition whose only goal is to attract international investment and offshore headquarters of European groups’.
Informed EU-watchers are in no doubt whatsoever that many of these barbs by Mr Jospin were directed fairly and squarely at Ireland Inc. (taken from IBEC newsletter May 2001)
Jacques Chirac, French President: [we need], “genuine fiscal harmonisation in Europe…in an open, competitive Europe with a common currency, it is damaging for the French to always be taxed more than everyone else” (Le Monde, 7 March).
Gerhard Schroeder, German Chancellor: [we need], “the Europeanisation of everything to do with economic and financial policy” (The Times, 22 February).
Pascal Lamy, EU Trade Commissioner: “a natural first step would be to harmonise the tax bases and to adopt minimum tax rates but the ultimate goal should be the creation of a European Corporate income tax whose proceeds would either finance the EU or be allocated to Member States…to get there, we may need QMV on tax matters relating to the single market: controversial ..... perhaps, but a logical development” (FT, 8 March).
Laurent Fabius, French Finance Minister: In an article for Le Monde Mr Fabius argued that pooling fiscal policy “is a logical follow-up to the euro”. He said that mere co-ordination of tax and spending between euro member countries was insufficient. He called for “a real budget federation” for the Eurozone. He said the budget federation would “constitute a lever for growth and employment” (The Times, 1 January).
Romano Prodi, President of the European Commission: said of the launch of the euro, “I believe we have taken a major step that ineluctably leads to greater convergence of economic rules.” He said this gradual process “starts tomorrow” (Sunday Times, 30 December 2001).
Hans Eichel, German Finance Minister: “In the longer term I can imagine a Europe Tax. It strengthens spending discipline in Brussels if responsibility for expenditure and income is put together” (Daily Telegraph, 29 December 2001).
Hans Eichel, German Finance Minister: “The currency union [the euro] will fall apart if we don’t follow through with the consequences of such a union. I am convinced we will need a common tax system. (The Sunday Times 23/12/2001)
V. Giscard d’Estaing: “It is self-evident that once there is a single currency and free movement of capital and savings, the fiscal system will follow the same path..... But it is not competition that decides this. It is incumbent on governments to decide.” (The Sunday Times 23/12/2001)
The European Commission made first use of its powers to discipline a member state over its economic policy by recommending changes to Ireland's 2001 budget.
Pedro Solbes, the commissioner for economic and monetary affairs, said the action, marking the first ever move to enforce the EU's broad economic policy guidelines through peer group pressure under article 99 of the EU treaty, was "necessary to reinforce economic policy co-ordination among euro participants and underlined the Commission's central role in the co-ordination process". (Financial Times January 24th 2001)
