EUROPEAN COMMISSION chief José Manuel Barroso criticised increased “economic nationalism” in the EU as the union’s executive branch set out ambitious plans to widen the reach of its internal market.
The proposed measures include easier cross-border venture capital investment in small and medium-sized companies, more recognition of professional qualifications awarded in other member states and greater use of carbon taxes.
The commission believes moves to deepen the internal market, which guarantees equal rules for all market participants, are crucial for Europe’s recovery from the worst economic crisis since the second World War. The aim, it said, was to make life easier for business, citizens, workers and consumers.
Mr Barroso did not name any particular country as he attacked those who saw the crisis as an opportunity to “roll back” the single market, but his remarks come against the backdrop of Italian moves to thwart foreign takeovers and the creation of new French committees to monitor core industrial sectors.
“In these times many like to question competition rules, exploit the missing links and seek refuge in economic nationalism. That is exactly the wrong approach,” he said.
“If we have learned one thing from this economic crisis it is that we are more interdependent than ever before.”
The commission’s proposal for a new Single Market Act comes alongside moves already under way to legislate for a common consolidated corporate tax base (CCCTB) in Europe.
The Government, which sees that CCCTB initiative as the backdoor to the harmonisation of corporate tax rates, has been under pressure from its euro zone partners to make a “gesture” on the Irish tax regime in return for lower interest on bailout loans.
Included in the draft Single Market Act are new measures to guarantee consistent treatment “of the various energy sources”. The ultimate aim, said Mr Barroso, was to tax energy instead of work.
The proposed overhaul of the Energy Tax Directive would expand where such taxes are applied. There would be a new CO2 charge on sectors not currently included in the emissions trading system and an energy charge applying to all fuel used for transport and heating.
While the commission said the proposal would continue to allow member states to opt for a reduced rate for energy products used in domestic heating, the proposal would remove distortions between the taxation of petrol and diesel. This has potential to increase tax on diesel, which is taxed at a lower rate in Ireland and most other member states.
The Single Market Act, championed by internal markets commissioner Michel Barnier, includes new measures to protect intellectual property with a long-delayed plan for a unitary EU patent.
The rights of consumers in cross-border transactions would be guaranteed and new measures will be taken to expand market rules over energy infrastructure.
