Finance ministers set to reject controversial levy plan
A controversial European Union plan to impose an additional tax on airline tickets to raise overseas development aid appeared likely to fall apart this week.
The EU’s economics and financial affairs council (EcoFin), comprising national finance ministers, is discussing the €5 ($6) levy at a 12 July meeting in Brussels, but late last week it appeared the scheme was likely to fail.
The proposal was adopted by the outgoing Luxembourg presidency at the last EcoFin ministers’ meeting on 7 June, but has hit substantial opposition in the meantime, says an EU official within EcoFin. Ireland, Malta and Spain have highlighted their fears that the tax would harm low-cost carriers, cause geographical isolation and hit tourism receipts.
But the scheme is backed by Belgium, France and Germany and had initially been intended to become mandatory across the EU. However, it has been watered down to a voluntary initiative, with EU nations, airlines and even passengers deciding whether to pay the contribution. Ministers are expected to discuss whether to adopt a text that would allow some states to progress, under an “opt-in” approach.
But with the European Commission due to publish next week its own feasibility study of how a pan-European aid-linked airline tax could be enforced in future, resolve has hardened among opponents against even signing up to the voluntary initiative for fear of it being superseded by a formal EC proposal, the EcoFin source says.
Cyprus, Finland and Portugal are also understood to oppose the initiative and it is unlikely that enough support could be found to back it. However, a compromise document, with opposition voiced in footnotes, could still allow the scheme to go ahead in countries that support it.
France and Belgium have indicated they would make the scheme mandatory within their borders if ministers agree to allow it to go ahead. Some UK finance ministry sources have doubts that all the revenue generated from the tax would find its way to overseas development aid, pointing out that the scheme’s three main supporters each have budget deficits to address.
Justin Wastnage / London
Source: Flight International
