Wednesday, 27 October 2010

EU taxation without representation coming your way?

by Marc Glendening

The European Commission last week revealed that it is pressing ahead with its plans to gain more powers of direct taxation over the citizens of EU member states.

On October 19th it announced (pdf) its desire to be able to levy taxes relating to greenhouse emissions, financial transactions, air transportation, energy or company profits.

The EU desperately needs more cash to help sustain new agencies that will exercise its extended range of powers introduced by the Lisbon treaty.

In addition, the crisis being experienced by the Eurozone countries means Brussels needs to build a much larger treasury so that significant transfers of money can be made to countries such as Greece that fall into difficulty.

We opponents of the idea of a single European currency have always warned that monetary union would necessitate fiscal union. As usual, we were accused of hysterical scaremongering and inventing threats that did not exist by the likes of Peter Mandelson, Chris Huhne and Ken Clarke.

This initial drive for new tax-raising powers follows Herman Van Rompuy's speech on the eve of his non-contested appointment in November 2009 as the organisation's new permanent president, when he declared that one of his main objectives was to enable the Brussels elite to by-pass national governments and come directly to us as individuals for cash.

He said that a good way to get the ball rolling, no doubt because of its potentially populist appeal, would be with a 'green fiscal instrument' though in time other types of tax would come into play.

Van Rompuy's speech was music to the ears of EU-centralists such as Andrew Duff, the Liberal Democrat MEP and president of the Union of European Federalists.

In response to the president's speech he said: “He is a federalist and federalists believe in that approach. We have got to have a reform of the financial system. We have also got to grow the size of the EU budget to reflect the growth of competences that are in the Lisbon treaty, such as foreign and security policy, a common energy policy and climate change measures.”

The EU is frustrated by having to go cap in hand to the governments of those nations that are net donors to its budget, who help sustain the whole edifice.

The realisation among the Brussels elite is that it is going to be very difficult politically in the years ahead to persuade the German, British and Dutch governments - the principal contributors to the budget - to keep squeezing their taxpayers.

Everything would be so much easier for the EU if the Commission, which doesn't face public election, could levy its own taxes without fear for the electoral consequences.

The EU is facing an existential moment: It needs to step up a gear and move towards full fiscal union if the euro is to be saved.
The stakes are now very high, both for the EU-centralisers and those of us who seek a Europe of democracies. If the former get the powers and financial resources they seek, the unified, centrally run state they seek will become a reality.

However, achieving these prizes involves the EU elite having to run the massive risk of coming out of the political shadows and making its impirial ambitions more and more apparent to the peoples of Europe.

Until now the very obscurity and tedium-inducing complexity of this parallel system of power has enabled the political classes of the member states to keep transferring new powers to it, away from their own parliamentary systems.

The granting of direct tax-raising powers may prove to be the EU's own Boston Tea Party moment. If the peoples of Europe rally to block such an extraordinary transfer of power and funds it is difficult to envisage how the EU can survive in the long term.

As the old saying goes: 'Be careful for what you wish'.


written by Marc Glendening

No comments: