Measures against tax competition being proposed by some EU member states would harm Malta, Labour MEP Alfred Sant has warned.

Speaking at an activity at Europe House in Valletta, the former prime minister said there was an increasing trend in Europe to combat tax evasion by eliminating tax competition. 

This is definitely not in the interests of small EU states like Ireland and Malta, which to date are in control of their sovereignty on taxation, he said.

"Tax competition is the best tool that small EU states like Malta can use to compensate for the disadvantages they face vis-a-vis the larger EU continental member states like Germany and France. Malta’s biggest challenge in the coming months and years is to reconcile itself against money-laundering and tax evasion with the need to maintain tax flexibility to ensure we remain competitive in the single market.”

Dr Sant also spoke on Brexit, saying that a ‘No Deal’ situation would likely have negative effects on Ireland, the Netherlands, Malta and Belgium.

The Maltese MEP said two political currents prevailed at the moment in Europe. Germany favoured the concept of a federal Europe with the same rules applying to all EU member states. Other member states insisted on the need of a Europe of nations. This concept was now attracting the likes of populist movements, especially in Italy and France, which opposed the concept of a federal Europe.

Dr Sant said the increasing social unrest around Europe was the greatest threat to the eurozone.

“We need to create a social Europe which cares for workers, self-employed, pensioners and those in need of social protection. This is eurozone’s greatest challenge at the moment. The European Parliament elections in May will give an indication on the future of the eurozone. It is clear that we need to create a social Europe based on the principles of social justice.”