Mario Monti is the EC Commissioner responsible for the Single Market and tax harmonisation. However he is technically incorrect to claim that the EC can only decide on certain taxes by unanimous voting of ministers. These directives need only be approved by EC Council of Ministers by qualified majority voting. Then there is our transitional' or temporary relief from putting VAT on essentials such as food, books and children's clothing. The effect of imposing VAT on buying a house could be worsened by the introduction of VAT on financial services.
Approximation is just harmonisation in stages.
Just as it allows discriminatory state aid for political reasons, the EC will allow special tax rules.7 These include soft VAT terms and other tax breaks to begging bowl members such as Eire. Some animals are more equal than others in what is supposed to be a single' or common' market. Although paying lip service to the need to stimulate economic growth and employment, the ESC claims that it would be logical to have tax conditions equivalent to within a single Member state'. Disturbingly it urges greater harmonisation of VAT, particularly in addressing the issue of zero rating. It proposes that company tax havens such as in the Channel Islands be abolished.