Fiscal union must include common tax base: Juncker

Fiscal union must include common tax base: Juncker

By Ann Cahill, Europe Correspondent

Friday, June 08, 2012

Plans for greater EU integration, due to be sketched out at the leaders? summit in three weeks, should include changes to tax policy including a common corporate tax base, Luxembourg prime minister Jean-Claude Juncker said.

He is one of five people drawing up proposals for greater fiscal and political union to come before the summit in response to the crisis threatening the euro.

"These are crucial days and weeks," said Mr Juncker, who is also the leader of the eurozone finance ministers? group.

"We are in a real stress moment," he told a conference in Brussels, adding that Spain?s banks were under stress but if the government needed help, it would receive it.

Echoing the words of Angela Merkel, the German chancellor, he said the way out of the crisis was "more Europe".

"The next step is a financial union and we need to have another look at budget discipline and deeper economic and monetary policy, including tax policy when it comes to a common tax base," he said.

The common corporate tax base is being strongly resisted by Ireland but the Government signed up to discuss all tax issues and while it can veto any change, a number of states could then go ahead together, which would put a lot of pressure on this country.

Mr Juncker is working with European Commission president Jos? Manuel Barroso, Council president Herman Van Rompuy, and the head of the ECB Mario Draghi on the outline of a plan for fiscal and political union.

Ms Merkel said in Berlin yesterday that a fiscal union would mean more joint budgetary policies were needed. "That means that we must, in a step-by-step process, give up more powers to Europe as well as allow Europe oversight possibilities."

She lowered expectations for steps such as eurobonds or a banking union to come out of the summit. She told German television: "I don?t think that there is a single summit at which the big design will appear," claiming a working plan for more Europe would be presented.

Mr Draghi on Wednesday acknowledged that the steps would be for the medium- to long-term, but he believed the important thing was to set out this vision and clarify steps towards achieving it. This, he said, would stabilise the situation.

a d v e r t i s e m e n t

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This appeared in the printed version of the Irish Examiner Friday, June 08, 2012

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