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27 October 2009

FT interview with Mario Monti: there is a need to moderate tax competition between member states

Monti highlighted that the EU may have to resolve the existing conflict between EU competition and internal market rules, as well as the social objectives of national governments. He called for a new deal that may include a reduction in tax competition.

Mario Monti highlighted the following points during the interview:

·         The European Union may have to moderate tax competition between member states if it is to revive the drive towards market integration
·         Giving new impetus to the single market can only be achieved if suspicions in the big European economies over the impact of integration on social models are addressed with real concessions
·         The EU should get rid of the idea that integration stands in the way of achieving social objectives
·         A total tax harmonization, which would require a unanimous agreement from member states, is not on the cards. However, a form of “tax co-ordination” could be possible now that the economic crisis has forced social concerns further up the agendas of all countries
·         Fixed stereotypes which have done so much to prevent integration could be overcome. There is a risk that if a new approach is not taken, the ‘single market fatigue’ that has for several years marked big economies such as France and Germany could jeopardize the integration project

© Financial Times

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