With the lucrative duty-free perk due to be abolished throughout the single market by mid-1999 airports, airlines and ferry companies are already devising creative strategies to circumvent the Brussels diktat. This week two Scandinavian ferry operators which ply the Baltic Sea came up with the innovative idea to exploit the tax-free status of the Finnish archipelago of Aland, granted special tax dispensation within the EU when Finland joined in 1995. Two Finnish ferry companies are considering re-routing their ferries via the 6,500 island archipelago. Analysts say this legalistic device may prompt other ferry operators to examine similar loopholes, like as stopovers in the Channel Islands on routes between Britain and France. Ferry companies on the Irish Sea might also be prompted to see the Isle of Man in a new light.

The re-routing ploy marks the first direct action accompanying the intensive lobbying campaign by vested interests to force a Brussels back-down.

While eurocrats will not look kindly on such aggressive defiance there are already signs of policy cracks appearing. Lobbyists suggest that a typical Brussels fudge may emerge, the life of duty-free possibly being extended to coincide with full integration of the single currency.