Belgium's big European idea the British won't love

Belgium's big European idea the British won't love

2nd July 2010, Comments 0 comments

Belgium launches its six-month European Union presidency on Thursday with one big idea -- cross-border economic government anchored in new pan-national taxes -- and one big problem: Britain.

BRUSSELS - The embryonic plan, according to a high-ranking Belgian governmental source, involves knocking EU heads together to turn concept into reality.

"We hear a lot about the idea of European economic government," said the source. "But the problem is knowing what goes into it -- and there, opinions are more divided. A big public debate on the subject could clear things up."

The Belgian masterplan -- from a country struggling to form its own government and weld together feuding Flemish and French-speaking regions -- would involve a more rounded extension of Germany's drive for greater budgetary discipline.

A "task force" run by the EU president Herman Van Rompuy, himself a former Belgian PM, is trying to separate the workable from the German and other wishlists, but Belgium sees a need to get the wary EU executive and parliament more on board.

"Germany is pushing hard for greater (national) budgetary surveillance, all well and good -- but we can also explore, for example, the financing of European projects via new sources of revenue," the government source added.

One of those revenue streams could some from a portion of the income from new types of taxes currently up for debate in Europe -- levies on banks, a tax on financial transactions or even a bloc-wide carbon tax -- to underwrite flagship projects.

"Couldn't these new types of income at least in part be channelled towards major European-level projects? This is a debate we should be holding," says the Belgian government source. "We shouldn't bury everything in national budgets."

Similar ideas -- monies funnelled straight into the bloc's collective budget, or at least indirectly by different member states towards common goals -- have long been advanced, with little success, by the European Commission.

The idea is principally driven by the outgoing Belgian finance minister Didier Reynders, even if he may well leave his post over the course of Belgium's EU chairmanship once Belgium negotiates a new coalition government.

It has its opponents even internally, with one European diplomat stating the obvious: "This will go down very badly in Britain."

For the new Conservative-Liberal Democrat coalition running Britain, even the slightest whiff of European-level "government" is anathema; anything which could be conceived as a transfer of sovereignty will be rejected out of hand.

The one certainty about British Prime Minister 's relations with Brussels is that tax will remain purely a national prerogative -- so Reynders and Belgium will need to find powerful allies and even stronger arguments if they are to make headway.
German Chancellor Angela Merkel has only recently converted to the cause of cross-border "economic governance," to use the preferred term in London, a policy goal long cherished by France which wants a political counterpoint to the European Central Bank in Frankfurt.

Berlin wants to strengthen often overlooked rules supposedly binding those countries that share the euro currency, while keeping a watchful eye on non-euro partners within the world's biggest individual trading zone.

But others -- and Belgium has always been seen as federalist-inclined -- want to go much, much further. Economic government necessarily "implies the transfer of sovereignty," says one Belgian official. That and an unholy row...

Yacine Le Forestier/AFP/Expatica

See also:

Waving the flag for a dying nation

 Eurozone crisis: Newcomer Estonia urges austerity

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