British Prime Minister David Cameron was yesterday criticised at the European Parliament for vetoing a new EU treaty while, according to many, not achieving anything concrete in return.
According to many MEPs who took part in a follow-up debate of last week’s summit, Mr Cameron showed a lack of solidarity and political leadership in order to safeguard the City of London but instead achieved nothing.
Mr Cameron – who is also being criticised at home and accused of isolating Britain – wanted the other EU member states to agree to a proviso in the new treaty so that the UK’s financial services will be exempt from further EU regulation. This was not acceptable to the other member states and the UK decided to block a new treaty at 27.
However, the other 26 decided to go ahead anyway, and agreed to an intergovernmental treaty instead.
European Parliament legal experts yesterday told The Times Business that if David Cameron was trying to avoid the future imposition of a Financial Transaction Tax – something which is being pushed by the European Commission together with France and Germany, this was not the way to do it.
“Britain will still be able to block an eventual Financial Transaction Tax as this needs unanimity to be approved. So, Mr Cameron’s position in reality didn’t change anything in this regard,” the experts said.
Currently there are some 20 Commission proposals for further regulation of financial services on the table. Malta is also against the introduction of a Financial Transaction Tax, if not on a global level. Asked whether the issue will return on the agenda in the coming years, the experts said that it will surely do but Malta still has a way out.
“The Financial Transaction Tax proposal is already on the agenda as the Commission has already made its formal proposal earlier this year. However, it’s up to the member states to accept it and at the moment there doesn’t seem to be unanimity to go ahead,” an expert said.
“In this regard, the new intergovernmental treaty will not change anything.”
Malta resisted attempts by France and Germany to include the Financial Transaction Tax in the new treaty deal, as proposed in the Merkel Sarkozy agreement. These attempts were successful. However, Malta will still have to deal with the Financial Transaction Tax in the current proposal.
“Malta and all the other 26 member states including Britain retain the right to block any taxation proposal which they don’t agree with such as the Financial Transaction Tax. No one can impose it on them,” Commission sources said.
Asked whether in view of this resistance such a tax could be introduced on a eurozone level only, the sources said that there might eventually be an attempt to go along that path but Malta as a eurozone member state may still refuse the proposal.
“The other way might be enhanced cooperation in this area where some member states can introduce a Financial Transaction Tax while others won’t. In this way, Malta might still not use its veto while rejecting such a tax,” the sources argued.
However, this scenario is the least plausible as this may eventually give an advantage to those member states opting out of the tax.
During the European Parliament debate, both European Council President Herman Van Rompuy and Commission President Jose Manuel Barroso underlined that the new intergovernmental treaty will be compatible with the current EU Treaty.
Mr Van Rompuy said the intergovernmental treaty had to respect existing treaties, single market rules and non-discrimination and, where possible, the European Court of Justice should be added, as is allowed by Article 273. He said the European Parliament would be involved in the process of drawing up the intergovernmental treaty.
Mr Barroso said: “The Commission will do all it can so that this agreement is legally safe and institutionally acceptable. The Commission will contribute to these negotiations as the guardian of the EU treaties and of our institutional model.
“Let me be clear: the Commission will not accept any intergovernmental treaty that would be in conflict with European Union law.”