Unice warns ministers off EU energy tax

ENDS Daily
May 25, 1999

European industry has sent a shot across the bows of EU finance ministers meeting in Brussels today, warning them not to proceed with a proposed energy products taxation directive. In a strongly-worded opinion paper, the European industry confederation Unice says the tax proposal - which aims to set EU-wide minimum tax levels for most energy products - would inevitably damage Europe's ability to compete with the rest of the world.

Germany will today try to get its fellow EU governments to support a watered-down version of the European Commission proposal in the face of opposition from southern member states, but Unice argues that it should be dropped completely in favour of more flexible and cheaper measures to reduce greenhouse gas emissions.

Unice's key criticism is that the proposal would not be able to ensure fiscal neutrality. Despite the fact that the European Commission expects member states to reduce labour charges as they increase energy taxes, there would be no compulsion to do so. "Experience shows that, with the exception of a few particular cases, the introduction of new energy taxes has not been offset by equivalent tax cuts elsewhere in national taxation systems," reads the paper. It also claims that the Commission's proposal to include nuclear power among the products covered shows there is "no clear and coherent objectives for control of greenhouse gas emissions".

Unice says it would be "very willing to intensify its existing dialogue" with the EU institutions in order to develop a strategy for climate change, and calls on the EU to "develop innovative solutions...instead of merely imposing penalties on European industry". Contacts: Unice, tel: +32 2 237 6511.

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