Business World

Tuesday 12 December 2017

Rejecting proposal only sign of life in EU gripped by paralysis

Donal O'Donovan

Donal O'Donovan

THERE is little doubt a number of the 'smaller' European finance ministers took real pleasure in the bloody nose they gave a plan for a tax on financial transactions yesterday in Brussels.

The French and German plan for a European wide tax was firmly kicked into touch at the Ecofin meeting -- despite backing from the European Commission.

'Merkozy' is the nickname for the united front of German Chancellor Angela Merkel and French President Nicolas Sarkozy who have backed each other at all the recent European summits.

Merkozy has gained an increasingly dominant position in the European decision-making process as the debt crisis goes on.

Some smaller countries resent, and fear, that growing dominance. Yesterday's meeting of the Ecofin council provided a rare opportunity to soften the Merkozy cough, and it was seized on with gusto.

Ministers including Michael Noonan promised to consider the plan -- a pet project of both Sarkozy and Merkel -- but only after they ensured it had no prospect of ever coming into force.

The big powers, supported by Belgium and Finland, had hoped to get backing at least from the 17 eurozone countries.

Opposition from non-euro members to the plan was expected. UK Chancellor George Osborne's hostility is total, while Sweden's Anders Borg is just as opposed -- he calling the plan a non-starter and a threat to growth.

That was expected. But countries including Ireland, Italy and Malta also blocked the tax, ensuring it was not a question of the euro countries against the rest.

Mr Noonan -- who last week warned of the danger to little countries of domineering European powers -- was unapologetic to fellow ministers.

He said self interest was the reason Ireland refused to back the scheme.

Rejecting the plan -- or at least sidelining it -- was one of the few things actually achieved at yesterday's summit.

In fact, there has rarely been a better example of the paralysis at the heart of the European Union.

Finance ministers spent much of the time yesterday discussing a tax that will never happen, because they rightly concluded that any efforts made in relation to the debt crisis itself would be a waste of time as long as the political situations in Italy and Greece remained unresolved.

Irish Independent

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