EU summit: ‘No compromises on taxation policy’
Gonzi’s stance at summit
Lawrence Gonzi speaks with Luxembourg Prime Minister Jean-Claude Juncker as an aide looks on at the EU summit yesterday.
Prime Minister Lawrence Gonzi yesterday told EU leaders Malta would never agree to common coordination of certain fiscal areas, particularly taxation.
Summing up the conclusions of the EU summit in Brussels yesterday, Dr Gonzi said that although Malta agreed with more integration in certain economic and monetary aspects, it would never accept losing its control over taxation.
“We agree on the broad conclusions of the EU’s vision to have more coordination in certain economic areas but we have our reservations on a fiscal union, particularly with regard to taxation. This is a no-go area for us and we will not agree to lose control over this important aspect of our economy,” he insisted.
Over the past weeks, Malta had already resisted attempts by Brussels to interfere in the “sacred” area of taxation policy.
Following a proposal to introduce an EU-wide financial transaction tax, Malta, together with a number of other EU countries, blocked the proposal.
The Prime Minister’s declaration yesterday came after the publication of a new blueprint by the President of the European Council, Herman Van Rompuy, which suggested a long-term plan to have an economic, fiscal and monetary union.
At the end of long hours of negotiations, mostly during the early hours yesterday, EU leaders had made little concrete progress on the new vision and only agreed on its broad aspects.
Mr Van Rompuy has now been asked by EU leaders to prepare a more specific road map for the next EU summit scheduled for October.
Malta also stood its ground over two of the six country-specific recommendations (CSRs) made to the island, suggesting raising the retirement age and revamping the wages indexation, known as the cost of living adjustment (COLA) mechanism. Malta registered its reservation though a formal declaration.
“We feel that the Commission’s assessment is wrong and we won’t be touching pensions and COLA,” the Prime Minister insisted.
Asked what will happen if the Commission does not change its position and Malta is outvoted at the Ecofin Council in July – where the CSRs are decided on – Dr Gonzi said: “Malta will not implement them.
“Our position is clear. The EU cannot force us on this because these recommendations are not legally binding.”
EU sources said that although Malta had been insisting on the need to change the text of the recommendations for weeks, it was very unlikely that this would happen.
“It is very difficult for the Commission to change its position as this may be interpreted as a sign of weakness by other member states,” a senior EU official said.
“These conclusions are approved by qualified majority and we feel that there is already a majority in favour.”
During their meeting, EU leaders agreed on more short-term measures aimed at further assuring the money markets on the sustainability of the euro.
Prompted by Italy and Spain – both currently under intense pressure due to rising borrowing costs – eurozone member states agreed, among other things, on the possibility of banks using the EU’s bailout funds to recapitalise; assistance through the same funds to bond buying by member states observing rigid debt and deficit reduction rules; and the creation of a single supervisory mechanism involving the European Central Bank.
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Charles Muscat
Jul 1st 2012, 01:30
Germany does not like the idea by throwing money to countries in need and spend it how they like.
I think it is rightly so.
Joe Portelli
Jun 30th 2012, 18:16
The PM was right in saying , that the maltese would never agree to common coordination of certain fiscal areas.
In fact the Maltese would never agree full stop - its in our nature.
If and when the EU stops handing out the richer country's money, Malta and indeed Greece, Ireland etc., would be begging to agree to common coordination of certain fiscal areas, because the POOR cannot afford to Choose !
Mr leo attard
Jun 30th 2012, 13:52
WHY does he want to keep control over taxation? so they can keep doing things without having EU inspectors to make sure all is on the level? ---
M Sciberras
Jun 30th 2012, 15:29
Try and think before you comment or at least try and learn! The moment we surrender our powers to tax to Brussels is th moment we lose our independence as a nation. And this is not what we voted for when we joined the EU. For your information average tax rates in the EU is 39%. In Malta average tax is 18% and our lower overall taxes keeps us competitive in the global economy of which we are a part. Incredible how some people will turn any argument into local political partisanship.
Mr leo attard
Jun 30th 2012, 13:27
WHY does he want to keep control over taxation? so they can keep doing things without having EU inspectors to make sure all is on the level? ---
Patrick Zammit
Jun 30th 2012, 13:04
Why is the taxpayer being forced to shore up banks which made wrong decisions (out of greed?) and whose top officials still get millions in undeserved bonuses?
When these same banks were reaping handsome profits, they never gave the taxpayer any money.
Joseph Gatt
Jun 30th 2012, 12:55
Yeah, I bet you Gonzi had the EU Leaders shaking in their boots.
M Sciberras
Jun 30th 2012, 15:31
Maybe not but he was standing up for your interests and mine. Joseph Muscat would have done the same. Try and think as a Maltese if you can, not as a cynic, Labour or Nationalist
J Micallef
Jun 30th 2012, 12:37
It would be much better for all concerned if the EU was to be limited to what it originally represented - an economic community. These frequent attempts at finding a 'one-size-fits-all' paradigm will ultimaltey result in the EU's undoing.
The Eurocrats need to bear in mind that unlike other european countries, Malta has made many sacrifices to make it to where we are now. We did not 'invest' in expensive railways that we could not afford, like Greece. We did not build a dozen football grounds that cannot afford to be maintained, like Portugal. We do not build hundreds of roads that lead nowhere with people's tax money, like Italy...and we have managed to reduce income tax all the way, introduced VAT in what must have been one of the smoothest transitions. We can also afford to have a VAT rate slightly lower than our neighbours, too.
So please, dear EU decision makers, don't try anything that screws us up!
I am still not 100% convinced about the Euro move, but again, our sense and sensibility (of the Maltese people, that is) ensured that this was a winning formula.
When Malta joined the EU in 2004, I believe that we added credibility to the Union. Unlike other countries who joined the EU for the sake of it and are now unable to face th emusic, we can be proud of our achievements. I was involved in a project some years back where new EU members had to bring their operation in a particular sector up to EU standard, and Malt awas the in the forefront, an example of good planning. Others, like Slovakia, Romania and Bulgaria were struggling and ended up opposing the changes and whining and grumbling, while the Maltese just forged ahead and reached and exceeded the targets.
My full support for the Governemnt to keep to stick to his guns on this...in fact, I would extend the statemtn to " No compromises on any fiscal area".
Mr J Xerri
Jun 30th 2012, 11:46
It is good to read that our Prime Minister has finally said that he would stand up to the EU on the matter of taxation and distanced himself from those who in the past criticised those who complained about the lack of EU action about the immigrants question and interpreted these complaints as anti EU action which would put us in bad light with the EU.
Paul Caruana
Jun 30th 2012, 11:34
Without going into the merits of wheather these recommendations make sense for Malta or otherwise, this is truly a fascinating glimpse on how the EU works, or dosn't.
On one hand, our PM states that Ecofin decisions are not legally binding, and may be ignored: on the other hand you have an unnamed senior EU offical saying that there is a majority to to approve said decisions, come next July. So basically the EU passes a law which is promptly ignored (this happens with local laws all the time, by the way)!
No wonder the EU is in disarray.
Charles Cremona
Jun 30th 2012, 11:23
These decisions will be taken by majority voting within the Euriozone club which we joined, I do not think the major players are going to take any notice of what Malta thinks, if we do not implement what they decide they will probably fine us or ask to leave the club.
George Cutajar
Jun 30th 2012, 11:22
Our PM made Malta's position clear to all EU leaders. Malta will not accept changes which can be detrimental to our pensions system and COLA. As usual the Nationalist Government is showing its true mettle where it really matters and we can now expect the movement of progressives, moderates and Eurosceptical quacks to come out with some for of statement accusing the PM of colluding with the EU to betray what we stand for.
The values of a true statesman can only be assesses on the International political scene and what we have achieved since joining the EU should be enough for level headed citizens to realise who was, is and will always remain on the right side of history. All we have to do is remember what Labour and their present dear leader told us before we went for the referendum. Once again the PM's stand has proven Labour wrong.
Rocco Camilleri
Jun 30th 2012, 11:19
I recall one saying that there are two Europes !! One of 'Abel' and the other of 'Kaine.' ABEL u KAJJIN biex inkunu Maltin and eventually this is being seen.
Joseph Grech Attard
Jun 30th 2012, 11:16
This is what we need at the present moment. Another huge problem to add to our ailing economy. What the report does not tell us is WHY is Malta against such a suggestion? The people ought to know the real reasons, and WHY is the EU suggesting such proposals. Only then can we say 'well done' or not to our PM.
His predecessor and himself have put us in the worst position ever felt in our little island. And some of the reasons were half-truths, misinformation and, maybe, lack of foresight, besides, of course, making everything shine and positive as if we were going to reach the seventh heaven. In just a few years we reached the seventh hell, if it exists. If it didn't we have discovered it.
The politics and policies of the last 25 years have failed miserably. We had a chance to amend, but we stuck our heads in the sand and refused to. Thank you Dr. Alfred Sant and Dr. George Vella for being truthful! It was not the time to join the EU with those conditions!
Either GonziPN changes its tactics completely, especially where it comes to corruption, or else, it should get out of the way and give a chance to newer blood, ideas and energy! What we have been doing all these past 25 years is destroying what we had, good and bad, and then try to rebuild, expecting one and all to applaud the rebuilding, even when the failure was the PN's and GonziPN's fault. How can a wound heal if one continues to remove its protecting crust? We should have immediately condemned the good that was being destroyed, especially that of being our own masters!
Michael Seychell
Jun 30th 2012, 16:38
@ Joseph Grech Attard - Reading between the lines your comment is a bashing to the Nationalist Party for convincing the electorate to vote for joining the E.U.
It is evident Mr Grech Attard that you have conveniently forgotten that your Labour Leader Dr. J. Muscat had stated on more than one occassion that the MLP has accepted the E.U. concept and assured one and all that his Party will never propose that we should leave the EU.
Michael Seychell Tal-Pieta
Joseph Grech Attard
Jun 30th 2012, 17:20
Mr. Seychell, when one reads between the lines one could arrive to any conclusion. Even the Bible itself can be attribute nto the devil. It is a very unethical and uhealthy way to respond to other people's opinions.
That i give a bashing to the PN about joining the EU THE WAY WE DID is evident and not between the lines! What is not evident is that i "conveniently forgotten ... ". Why should i forget? I, too, now find it impossible to think that we could get out of the EU., unless the big brothers say so, although Silvio Berlusconi has just suggested it to the Italians!! But the conditions of joining did not protect our interests. The politics and policies have failed miserably. Never in our history did we have it so bad. We made 6 billion debts which, one day or,other, we have to pay back, or else the EU shall, indirectly, put our island on sale, as happened in the past to our forefathers. History reats itslef one should remember. Our resources are practically NIL, but for our toil, hard work and sacrifices.
Mr Michael Debono
Jun 30th 2012, 11:12
It is quite strange that Gonzi as Prime Minister opposes the increase in the retirement age when he already, he that is his government, alreay agreed to increase the retirement age to 65 Years.
Or is this monkey busness. The P.L. has announced that it will not change the retiring age of 60, and the P.N. just as monkeys do, did the same now after having announced the increase to 65 Years.
Eddy Privitera
Jun 30th 2012, 10:47
When Dr.Joseph Muscat had said that if necessary, Malta must say NO when our country's vital interest is at stake, GonziPN apologists immediately said that if Dr. Muscat has his way, " Malta would be isolated" ! The same "isolationist" rhetoric we had heard before the EU referendum !
It seems that Dr. Gonzi has learnt something from Dr. Muscat. We still have to see though, if GonziPN maintains its stand, especially knowing that the PL opposition is four-square behind the government on this one !
R. Caruana
Jun 30th 2012, 10:36
And to say one once said that whatever the E.U said was gospel.
j brincat
Jun 30th 2012, 10:28
100% with PM here but still doubt the final outcome as Germany is hell bent on tax harmonisation across all EU countries!
(jb)
Rocco Camilleri
Jun 30th 2012, 10:19
Veru tal-biki meta tisma dawn ta' l-EU iridu jindahlu f'kollox xi jridu jghamlu pajjizi ohra. Nispera li Malta ssib sapport minn pajjizi ohra Ewropej ,ghax inkella wisq nibza li jkunu dahluna fli xkora. Mela hekk sew tort ta' tmexxija hazina u negligenza minnaha ta' l-EU li josservaw il-finanzi propja tal-pajjizi fil-club, spiccajna biex naghtuhom il-flus f'Bailouts u x'naf jien. Dan wiehed irid iqies li ahna fil-pozzizzjoni li qedien b'Defecit u Dejn Nazzjonali moghola s-smewwiet kif jista jkun li nghamlu dan. Kullma ghamilna matul iz-zmienijiet li mghoddija ta' sebghajnijiet / tmeninijiet se nitilfuhom kollha ftit ftit. U dawn ma' kienux progetti tac-cekcik !!, bizzejjed insemmu l-Airport komplut bit-twaqqif tal-linja Nazzjonali - Air Malta, Sea Malta, il-Freeport, banek, Ene Malta - Fuel u Gas. pensjonijiet, 40 hour week, leave u sick leave u ruxxmata ohra, fejn ta' l-ewwel kollha kienu f'idejn il-barranin u barra minn dan fil-kaxxa ta' Malta kellna hames mitt miljun lira Maltin ( Lm 500.000,000) barra id-deheb li kellna x'jghamel tajjeb, fejn dawn kollha sparrixxew u flokhom dahalna d-dejn. F'dan l-ahhar kwart ta' seklu taht il-PN sar xi haga ohra imma lanqas jibdew ma' dawn il-progetti li semmejt fil-bidu. Hemm bzonn li Gvern juri snienu ghax dawn ta' l-EU se' jispiccaw igibuna idd wahda wara u l-ohra quddiem flok nghid haga ohra. Irridu nkunu Sinciera u dak li hu ISWED tghidlu ISWED u dak li hu ABJAD tghidlu ABJAD. Hemm bzonn li ma' nghoqodhux ninhlew fil-glied intern tal- Partit ghax qed nitilfu l- propja xoghol li ghandu jsir, avolja issa wasalna fl-ahhar.
Noel Abela
Jun 30th 2012, 10:13
I admire our PM's stand. Let's all hope and pray he stays true and strong to his convictions.
Jean-Claude Juncker?
Is he not the one who was quoted by German press agency DAPD as saying:
"When the going gets tough, you have to lie." ??
Peter Murray
Jun 30th 2012, 10:35
In my experience whenever the going gets tough -the tough go shopping
Peter Murray
Jun 30th 2012, 10:06
The EU must be shaking in their boots with this declaration by Malt.However,it is merely a token and meaningless gesture as Malta will do what it is told by the EU hierarchy bully-boys and girls when push come s to shove.
Noel Abela
Jun 30th 2012, 11:02
Yes Peter. I was reflecting on this. We all know that we are too little to dictate terms.
Therefore, we may dare to assume that, Dr. Gonzi is emboldened by other state leaders of the same convictions.
Maybe there is hope after all.
james cairns
Jun 30th 2012, 11:33
I couldn't agree more. The EUSSR gets its way by bullying its members. When will the EU member nations wake up to the true nature of the totalitarian regime ie. it's not a democratic, it's not accountable and nobody ever voted for the parasites that are running it1
Peter Pace O'Shea
Jun 30th 2012, 09:49
I agree and admire our Prime Minister for taking such a stand on refusing to allow Malta's fiscal policy be dictated by the EU and also on the retirement age.
The founder of the EEC, EC now EU was Jacques Delores and if I recall reading a comment he had made, I believe he had said that the EU was not structured to accomodate more than around 10 countries. In my opinion every country has its own particular circumstances and centralisation of decisions can very often be beneficial to some member states and harmful to others.
The idea of a European Union is good but it should have never reached such an intimate level of imposing member states to adopt a common currency as this overshadows domestic monetary policy to tune the economy of each member state and once again we cannot have a one shoe fits all policy.
When the UK, Sweden and Denmark joined the agreement was that they would adopt the euro if the wanted to, not like in our case. I am sure that recent historical events have convinced the UK to keep its own hard currency.
Albert Farrugia
Jun 30th 2012, 09:40
And these people had the cheek to accuse Alfred Sant of wanting to take us out of Europe.
Please choose the reason of your report below: