Eurobloat #0095 • March 2018
March was the month the Union discovered that the answer to every question is more tax, more court, and more Brussels. It proposed a levy on American firms, abolished its own members' arbitration tribunals, and handed its top job to a man who applied for one post and ended up with another by teatime.
Folly of the Month: A brand new tax, aimed squarely at people who do not vote here
On 21 March the Commission unveiled a digital tax package, the centrepiece of which is an interim three per cent levy on the gross revenues of large digital firms. Note the word gross. This is not a tax on profit, which civilised countries levy, but a tax on turnover, which means a loss-making company would pay it too, and it was aimed with great precision at firms headquartered in a country that does not send MEPs to Strasbourg. The market took one look and wiped more than fifty billion euros off the affected companies in a matter of days, which Brussels appears to regard as a feature rather than a side effect.
1. The court that decided member states may not have their own courts
On 6 March the Court of Justice ruled in Achmea that arbitration clauses in agreements between two member states are incompatible with EU law, on the elegant logic that no tribunal may interpret European law unless it answers to the Court itself. At a stroke roughly two hundred intra-EU investment treaties were declared suspect, because the one thing Luxembourg cannot abide is a dispute it does not get to settle.
2. Parliament invents the EU's own taxes
On 14 March MEPs adopted a resolution on reforming the Union's own resources, calling for fresh categories of EU-level revenue and inviting the Commission to consider a levy on plastic and single-use items. The pitch is always the same, namely that the budget would be fairer if the money came straight to Brussels rather than passing through the grubby hands of elected national treasuries.
3. A common corporate tax base, because thirty-two views are too many
The next day, 15 March, Parliament voted by 438 to 145 for a common consolidated corporate tax base, a long-cherished scheme to harmonise how companies across the Union calculate their profits. Sold as simplification, it is in practice a single rulebook written in one place, and the proposal helpfully bolts on the notion of digital presence so that tax may be owed in a country a firm has never set foot in.
4. Promoted twice before the coffee went cold
February's Selmayr manoeuvre dominated March's recriminations. The Commission's most powerful official applied for deputy Secretary-General, was appointed to it, and was then elevated to Secretary-General the same morning when the incumbent conveniently announced his retirement, in a procedure so swift that no rival could apply. MEPs spent March demanding the appointment be reassessed, and the Ombudsman would later find maladministration, which is the EU phrase for a stitch-up nobody will be punished for.
5. A panel of experts to decide what you may read
In March the Commission's High-Level Expert Group delivered its report on online disinformation, the seed from which a Code of Practice for platforms would grow. The premise is that the Union must marshal the platforms to police what circulates, which is a curious remedy from an institution whose own pronouncements about itself rarely survive contact with the facts.
→ digital-strategy.ec.europa.eu
6. Begging bowl in Varna
On 26 March the Union's leaders met Recep Tayyip Erdogan in Varna to keep the migration deal alive, a bargain in which the EU pays Ankara to hold back people it does not wish to see at its own borders. Erdogan, who days earlier had told Brussels to stop delaying and hand over the money, came away with no concrete compromise, and Tusk admitted as much. The lesson, that paying a strongman to manage your frontier leaves him holding the purse strings, was apparently filed for later.
7. Twenty-seven flags, fourteen responses
After the Salisbury poisoning the European Council declared on 22 March that there was no plausible alternative explanation to Russian responsibility, a fine sentiment that translated into action only when it was left to member states. Fourteen of them expelled Russian diplomats, the rest weighed it carefully, and the decisive lead came not from the Union as such but from a country that had just voted to leave it.
8. Guidelines for a country that is leaving
Also on 23 March the EU27 adopted their guidelines for the future relationship with the UK, observing that Britain's red lines limited the depth of any partnership on offer. The document reads less like a negotiation and more like a school report, the recurring theme being that the pupil would do so much better if only it stopped insisting on governing itself.
9. The Union will now publish your postage stamps
On 13 March Parliament backed a regulation on cross-border parcel delivery requiring couriers to publish their tariffs on a website so regulators can frown at prices they consider unjustified. A continent that cannot agree on its own borders or its own budget has at last found unanimity on the pressing matter of how much it costs to post a parcel to Latvia.
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