The prospects for an extension of the duty-free regime beyond June have faded sharply in Brussels following a meeting of EU ambassadors.
A senior diplomatic source has told The Irish Times that when envoys met at the weekly COREPER meeting on Thursday to consider a compromise lifeline thrown out by the Germans at Friday's Bonn summit, it was opposed by nine member-states - a majority.
It emerged, the source says, that far from standing alone against an extension, Denmark was strongly supported by envoys from Holland, Belgium, and Portugal. Those ambassadors willing to argue for the German Presidency compromise were from Ireland, France, the UK, Spain and Greece.
The meeting was also told that the legal service of the Council of Ministers endorsed the view of the Commission's service that legal action against an extension was likely to be successful and very expensive. Rail, bus, retail, and environmental interests have already pledged to go to court.
To approve an extension, a unanimous vote of member-states would be required on the basis of a proposal from the Commission. The latter is still adamantly opposed to a stay of execution and shows no sign of willingness to submit a proposal. It will have taken strong comfort from the COREPER discussion which often reflects more accurately the real position of member-states away from the glare of publicity.
The Danish Minister for Finance, Ms Marriane Jelved, is now likely to press at the next meeting of Finance Ministers on March 15th that the extension issue be allowed to rest and that the ministers concentrate instead on tackling the problems associated with the successor regime.
The temptation for leaders to run with the populist ball again at the Berlin summit on Agenda 2000 at the end of the month may still, however, prove irresistible, though futile.
On Friday, Germany's Chancellor, Mr Gerhardt Schroder, had suggested allowing the excise duty regime to be extended for 2 1/2 years while VAT would be introduced as proposed in June.
Member-states agreed unanimously in 1991 to the abolition of intra-EU duty-free sales in June 1999. It has been fought by a well-organised campaign, the International Duty-Free Confederation, heavily funded by the ferry, air and airports industries and backed by the unions. Ireland has been the industry's most vociferous ally until recently. Significantly, however, Europe's consumer groups have been very silent on the issue.
