24th Jun 2022

Spain backs EU taxes, joining Poland, Austria, Belgium

  • Keeping a tally of which EU states are in favour and which against. Right now it is 4-4 (Photo: ansik)

Spain has come out in favour of direct EU taxation, one of the ideas being considered as part of a major review of European Union budgeting currently underway.

In a statement indicating the government of Jose Luis Rodrigues Zapatero is much more receptive to the idea than London, Paris or Berlin, which have come out sharply against such proposals in recent days, the prime minister said on Tuesday: "any consideration to strengthen economic and financial capabilities by the EU will be seen by the government with interest."

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In an interview with EU budget commissioner Jasnusz Lewandowski on Monday, the Financial Times Deutschland reported that as part of a budget review process, the question of EU direct taxation - which would be applied for the first time - was under consideration, notably from a tax on aviation fuel, a levy on carbon trading or on financial transactions.

Mr Zapatero added however, according to El Mundo, the Spanish daily, that any more detailed reaction at this point while the review was still underway, would be "somewhat premature" and that direct EU taxation is still "at the stage of an idea that has not yet been finalised.

"When realised, if it is made concrete by the European Commission, we will give timely opinion," he said.

Spain joins Poland, Austria and Belgium amongst the EU member states that have backed the concept.

A spokesman for Austrian finance minister Josef Proell said on Wednesday: "We take a positive view of the Lewandowski announcement."

And the Belgian budget minister Melchior Wathelet, said that the European Union would be "fairer" if it had its own income sources.

The idea, which would be an EU first, is explosively controversial.

The Dutch government, currently in formation after an inconclusive general election in June, looks set to join the UK, Germany and France in taking an ill view of the ideas. The three EU economic powerhouses in the last few days have sharply criticised what they view as a profound encroachment on national sovereignty, although it was initially reported that Mr Lewandowski received a sympathetic hearing from German finance minister Wolfgang Schaeuble.

In the Netherlands, the EU-wary conservative liberals of the VVD party, who in its campaign said that it wanted to limit the EU to its "core competences," have agreed in principle to a right-wing minority coalition with the historically robustly pro-EU Christian Democrats but backed up by the far-right Freedom Party of Geert Wilders, who is strongly anti-EU.

On Tuesday, Elly Blanksma, spokeswoman for the Christian Democrats said: "taxation is a matter for the member states and should remain so."

Hans van Baalen, a leading member of the VVD - although an MEP and not a nationally elected deputy - told reporters he was very skeptical. "I'll give you a a word of advice," he told reporters. "Where it starts small, there will be more and more asked of the EU citizen."

At the same time, VVD leader Mark Rutte, expected to be the country's next prime minister, said during the election campaign that he wanted to slash the Netherlands' contribution to the EU by a billion euros.

Mr Lewandowski has said that cash-strapped member states wanting to reduce or even eliminate their national contributions to the EU would have to replace the cash from somewhere and that member states are now more open than ever to EU taxation as a way to partly replace the money they have to send to Brussels.

Direct taxation could thus permit the new coalition to square the circle by allowing the VVD to keep their promise to cut Dutch contribution by a billion and satisfying the Christian Democrats that EU finances are protected.

The European Commission for its part stresses that it will not comment on statements by national politicians on ideas within the budget review until it is completed at the end of September.

The budget commissioner after his holidays will continue his soundings of national capitals. He has already visited Vienna and Berlin and will meet French finance minister Christine Lagarde at the end of August, Rome and Madrid in September and the UK chancellor, George Osborne, on 30 September, after the budget review is expected to be published.

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