EUROPEAN CONVENTION: The Convention on the Future of Europe has abandoned a proposal to abolish national vetoes on measures that could lead to tax harmonisation in the EU. But the Government has flatly rejected a compromise proposal that would allow for qualified majority voting on a limited number of tax issues.
The compromise, which was adopted by the convention's 12-person praesidium on Wednesday evening, would allow EU governments to decide unanimously that measures concerning tax fraud and unfair tax competition could be decided by qualified majority.
Mr John Bruton TD, a member of the praesidium, expressed satisfaction that moves to introduce tax harmonisation had been rejected.
"The proposal will be one that will confine the possibility of majority voting to situations where there is tax fraud or tax evasion that is interfering with fair competition and where those situations have been identified unanimously in a decision of the Council," he said. "Most people will be quite surprised, given the level of pressure that there was for majority voting in this area in order to achieve harmonisation, to see that we were able in the praesidium to achieve something of this nature."
The Government's representative at the convention, Mr Dick Roche, dismissed the compromise proposal, arguing that preserving unanimity was no obstacle to fighting fraud.
"There is no difficulty there, none, zero. If there is an issue of fraud, it can be dealt with. If there's an issue relating to competition, if they believe that there is unfair competition in the tax area, there are already arrangements in the treaty for dealing with unfair competition," he said.
Members of the convention appeared deeply divided yesterday over plans to reform the EU institutions, with small countries resisting a proposal to replace the six-month, rotating presidency with a full-time president of the European Council.
But there were signs of a compromise emerging on the future composition of the Commission, with representatives of both large and small states responding warmly to a formula proposed by the Benelux countries. Under this formula, the Commission would be limited to 15 members but those member-states not represented on the Commission would nominate associate commissioners who would attend Commission meetings without being allowed to vote. The right to nominate a commissioner would rotate among member-states on a principle of strict equality.
Germany's Foreign Minister, Mr Joschka Fischer, said that combining the principle of a smaller commission with equality among member-states could provide an essential part of a compromise.
"I don't think we are very far from a resolution here," he said.
Mr Roche questioned the tactical wisdom of proposing such a compromise before the final negotiations on institutional reform but he acknowledged that the Benelux proposal preserved the principle of equality that Ireland regards as sacrosanct.
Mr Bruton said that it was now certain that the principle of equality would be part of any agreement at the convention on the future of the Commission.
"The fundamental principle is equality of treatment of member-states in the matter of having a commissioner and the voting rights of their commissioner and the rotation of their commissioner. That principle is now inviolable; it will not be breached."
The convention is due to present EU leaders with its final draft of an EU constitution on June 21st. But the convention's president, Mr Valéry Giscard d'Estaing, suggested yesterday that it might only be possible to complete parts I and II of the treaty - dealing with EU institutions and fundamental rights - next month.
He suggested that the convention could work for a further month to complete part III, which deals with specific EU policies.
Mr Bruton questioned whether EU leaders would agree to such a delay and claimed that the convention could complete its work in time for next month's summit in Thessaloniki.
"I think we'll give them everything or nothing and I think it's probably the case that, if we're genuinely not ready, it would be better to just give them a progress report in Thessaloniki on everything and say we'll come back to you in three weeks," he said.
