European Commission president José Manuel Barroso will push ahead with a plan to harmonise the corporate tax base in Europe despite opposition from several states. Jamie Smyth, European Correspondent, reports.
He has also dismissed concerns among some EU finance ministers about the rising strength of the euro against the dollar and its likely impact on economic growth.
In an interview with The Irish Times, Mr Barroso said he was supporting a strategy being formulated by tax commissioner Lazlo Kovacs to harmonise the corporate tax base. He also said that he hoped member states would support it.
"We are behind it and we think it would be good for business," said Mr Barroso, who also urged member states in the euro zone to move towards greater economic co-ordination. "It would make life easier for companies that are operating across borders so it makes sense. It is not harmonisation for the sake of harmonisation."
When asked about the staunch opposition of several member states, including the Republic, Mr Barroso said the commission was not proposing the harmonisation of tax rates only the base - the hundreds of different elements upon which tax is levied.
Ireland is leading opposition to the tax strategy being developed by the commission and has warned that harmonising the base would inevitably lead to the harmonisation of corporate tax rates, the rock upon which Ireland's economic success is founded.
In an unusual move, Ireland's European commissioner Charlie McCreevy spoke against the plan, describing the strategy as harmonising corporate tax rates by "the back door".
Mr Kovacs is due to publish a paper on the corporate tax strategy in the new year and present a final policy proposal for debate by member states in 2008.
Ireland, Britain and several new member states oppose the Mr Kovacs's draft plan.
Meanwhile, Mr Barroso dismissed the recent fears expressed by French finance minister Thierry Breton over the rising strength of the euro against the dollar and poured cold water on calls by some states to bring the European Central Bank under more political supervision.
"Some people say the euro is too strong, personally I believe it is not the euro going up it is the dollar going down," said Mr Barroso. "In fact, with the so-called strong euro, German exports are booming, and. . .there are different situations in Europe with booming economies like Finland, Ireland or Spain in the euro area," he said.
He supported a more co-ordinated approach to the political and economic policies in the euro area, but stressed that the ECB's independence should be respected.
He said it was more important for member states to do their work by introducing structural reforms to enable them to adapt to new competitive conditions.
