The European Union needs to levy a direct tax on citizens to fund new responsibilities for defence and foreign policy and to pay for EU enlargement, according to the Belgian Finance Minister, Mr Didier Reynders.
Irish officials were taken by surprise at the announcement yesterday at the Brussels Economic Forum. The Government swiftly dismissed the idea as unworkable and unrealistic.
As opponents of the Nice Treaty last night seized on the proposal as ammunition in their campaign, a Government spokesman insisted the idea "doesn't have a hope of being taken seriously by other member-states, including Ireland". Belgium assumes the EU Presidency for six months in July and Mr Reynders, who currently presides over the euro-zone group of finance ministers, said discussions on the new tax would start early in the presidency.
He said EU leaders would make a final decision at a summit in the Belgian royal palace at Laeken in December.
Britain and Ireland are likely to be the most vociferous opponents of the Belgian proposal, which needs the unanimous support of all 15 member-states to be implemented.
Mr Reynders suggested EU citizens would accept the new tax as an extension of the system in many member-states where tax is paid at local, regional and national levels. For Irish taxpayers, the closest equivalent is the 2 per cent health levy. Belgian officials say a new EU tax would initially complement the present system of funding the EU but could eventually replace it.
They argue citizens would see a direct EU tax as a more transparent way of funding the activities of the European institutions.
Mr Reynders's proposal comes in the context of a fledgling debate about Europe's future shape that will culminate in a treaty-making summit in 2004.
He remained vague yesterday on the level of the new tax and whether it would take the form of a tax on income or on sales. He said such details would be worked out among EU finance ministers. There is little chance of the measure securing the necessary approval this year for its introduction. But Belgium believes it is important to put the idea on the European agenda now in the hope it could form part of a package of reforms later.
