[A-List] Prodi: national ministers to fight back

[Chris Burford <cburford@xxxxxxxxxx>]

This angle on the story from Thursday's IHT had an interesting perspective
on how the contradiction between the centralising commission and the
national governments will play out: the national governments will propose
enhanced powers for the Council of Ministers, and related structures.

But already that means they have accepted the premise: that there must be
closer integration and direction of european finance capitalism. The
livelier the argument, the clearer it will be that this is about how best
to arrange the executive committees that will run the common affairs of
European capitalism, and win toleration from its people.

The conflict is a sign of the vitality of this process.

Chris Burford


>>>


Prodi surprises with call for direct EU taxation John Schmid International
Herald Tribune Thursday, May 23, 2002


FRANKFURT The European Union's executive arm proposed a direct EU tax
Wednesday as it outlined a radical blueprint to overhaul EU institutions.

The Brussels-based European Commission called for greater powers for itself
in the sensitive areas of foreign and economic policy.

The plans, which are meant to gird the West European bloc for a historic
extension to the east, court a clash with member states like France and
Britain that resist a significant dilution of their national authority,
diplomats in Brussels said.

"The time has come to launch a grand political project," the commission's
president, Romano Prodi, announced as he presented the detailed proposals
to the European Parliament.

Prodi became the latest European leader to sponsor a sweeping realignment
of the 15-nation bloc as part of an EU constitutional convention. In a
process that some compare to the founding of the United States in 1776, a
113-member panel, headed by a former French president, Valery Giscard
d'Estaing, will draft an EU constitution and enshrine a new role for
Brussels in time for it to accept as many as 10 new countries from Central
and Eastern Europe. The enlargement, which is set to begin in 2004, will
vastly increase the complexity and diversity within the EU.

The biggest surprise came at the conclusion of Prodi's address as he called
for "the power to impose a tax policy."

"That will provoke some of the most opposition," said Heather Grabbe,
research director at the Center for European Reform in London.

Direct collection of EU taxes has long been a contentious idea because it
would bring the European Union one step closer to the creation of an EU
Finance Ministry and other trappings of a federal government. But although
a pan-European tax raises fears of an EU "superstate," in reality, the EU
budget is little more than 1 percent of the bloc's total economic output.

The EU currently funds its spending through a complex formula that siphons
a share of tax revenue from each member government.

Tax collection, Prodi argued to the EU Parliament, "is a fundamental
prerogative of all democratically elected parliaments in the world - with
the unfortunate exception of this one." The commission's 26-page "Project
for the European Union" contains many other points of discord, notably in
the areas of foreign and security policy, diplomats and European policy
analysts said.

Leaders like Prodi argue that Brussels needs to accumulate new authority to
prevent gridlock from competing national interests, while national leaders
balk at the loss of national sovereignty.

That clash is evident in Prodi's plans for a "step by step" transfer of
foreign policy to the commission from the European Council, which is the
body that represents national governments.

"If Europe is to increase its influence on the world scene and be a
credible partner for the United States, it must speak with a single voice
on all aspects of external relations," Prodi said in his speech.

The EU's high representative for foreign affairs, a post currently held by
Javier Solana, reports to the European Council, which is comprised of
elected members from each of the 15 member states. Prodi argued that the
job belongs in the commission to eliminate the "present bipolar organization."

But the plan, which effectively gives the commission a premier role in
initiating foreign policy, runs counter to a movement under way in France,
Britain and a handful of other member states to enhance the authority of
the council, not weaken it.

France and Britain believe that Prodi's plan encroaches on core national
authority. Those two countries have endorsed a plan to create an EU Council
president, elected for five years by member states, as a counterweight to
the commission.

On another key point, the commission is seeking more binding force for the
economic policy guidelines that it parcels out to the national governments
within the euro zone.

It also wants to transform the informal Eurogroup of finance ministers, who
currently have no binding policy-making authority, into a real EU body with
its own representatives.

The overall effect, some fear, is a two-speed Europe in which the 12
euro-zone countries effectively run their own economic policy without input
from the rest of Europe. By making Britain even more of an outsider to
Europe's economic core, this could complicate Britain's plan to join the
euro bloc.