Ministers reject EU tax plan

The Belgium finance minister's plan was not well received

by the BBC's Europe business correspondent Patrick Bartlett in Brussels

A controversial proposal for a direct tax on all European Union citizens has been given a sceptical reception by EU finance ministers meeting in Brussels.

The so-called euro tax would help fund the EU's 100bn euro ($80bn, £50bn) annual budget.

At present the money is raised by the union's fifteen national governments.

But several ministers warned that the proposed tax was more likely to cause conflict than achieve its supposed goal of bringing the EU closer to its citizens.

Belgium plan

The idea of citizens paying an individual tax to EU headquarters in Brussels is being championed by Belgium, current holder of the EU presidency.

Backed by the European Commission, supporters believes the tax would help combat popular scepticism about Europe by creating a stronger link between the EU's institutions and its citizens.

But the idea has divided member states. During a televised debate, the British, Irish, Swedish and Dutch ministers all rejected and even ridiculed the idea.

The Dutch Minister, Gerrit Zalm, said that the last time such a tax had been introduced in the Netherlands, it had sparked the eighty years war against Spain in the sixteenth century.

His Irish Colleague, Charlie McCreevy, said it was a tax dispute which had also triggered the American war of independence.

Intensifying debate

Speaking for the euro tax, the German Minister, Hans Eichel, said it would promote greater accountability and openness, a view also expressed by Luxembourg.

Supporters insist that the tax would not lead to an increase in EU spending.

Most of the budget presently raised by the union's fifteen national governments goes on agricultural subsidies and development aid to poorer regions.

Beneath the humorous scepticism is a serious concern in some countries that a new EU wide tax would be seen as ceding more power to Brussels.

And tax has become another potential flashpoint in the intensifying debate about the future shape of Europe.