Enhanced cooperation is a method of EU governance created in the Treaty of Amsterdam and greatly enhanced in the Treaty of Nice. It provides for a subset of EU countries (set at a minimum of eight), with the approval of a qualified majority in the Council, to transfer control of some shared competency to the EU exclusively. This sounds rather complex, but it simply means that in an area where the EU and member states both have policy making power a group of member states can transfer their policy making power to the EU without forcing all member states to do so. This provision of the treaties has never been used. The Commission now has a proposal that would change that.
Tax policy harmonization has been a long-term goal of the EU, but member states lead by Britain have resisted. Currently, the setting of tax rates themselves is reserved exclusively to the member states. However, the setting of rules governing what can be taxed is a shared competency. The Commission wants to establish a common corporate tax base (the parts of businesses' profits that are taxed taking tax breaks and exemptions into account), but the move is being resisted, again lead by Britain, because of fears this will lead to interference in the corporate tax rate itself. However, the group of states against harmonizing the tax base is too small to block a proposal by the Commission to standardize the tax base in just 20 member states.
This success (or failure) of this proposal could be the most important indicator of the future direction of Europe. If member states sign off on this first step towards a "veritable speed" Europe, then it may signal greater cooperation. However, if the proposal is rejected, or even worse is accepted and then fails as a policy, Europe will find itself lacking a valuable tool for moving Europe forward again. This is all speculation on my part, and I am frequently proven completely off base, but this is a development to watch. At the very least, it means that a two-speed Europe may be the solution to the Constitution impasse.
Tax policy harmonization has been a long-term goal of the EU, but member states lead by Britain have resisted. Currently, the setting of tax rates themselves is reserved exclusively to the member states. However, the setting of rules governing what can be taxed is a shared competency. The Commission wants to establish a common corporate tax base (the parts of businesses' profits that are taxed taking tax breaks and exemptions into account), but the move is being resisted, again lead by Britain, because of fears this will lead to interference in the corporate tax rate itself. However, the group of states against harmonizing the tax base is too small to block a proposal by the Commission to standardize the tax base in just 20 member states.
This success (or failure) of this proposal could be the most important indicator of the future direction of Europe. If member states sign off on this first step towards a "veritable speed" Europe, then it may signal greater cooperation. However, if the proposal is rejected, or even worse is accepted and then fails as a policy, Europe will find itself lacking a valuable tool for moving Europe forward again. This is all speculation on my part, and I am frequently proven completely off base, but this is a development to watch. At the very least, it means that a two-speed Europe may be the solution to the Constitution impasse.
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