European Union finance ministers will try today to reconcile national interests that have so far foiled a deal on common rules for taxing income from savings held abroad and on minimum levels of energy tax.
More tax co-ordination and the removal of cross-border fiscal hurdles should ease the way that the 15-nation internal market works and are part of a 10-year agenda to boost competitiveness and growth that EU leaders will discuss on March 20th-21st.
EU leaders have pledged to reach a deal on both issues, which require unanimity in voting. But demands raised by one EU member state have meant that the bloc has already failed to meet its self-imposed deadline of end-2002 for an agreement.
Yesterday, objections from Italy scuppered an agreement on savings that aimed to help member states recoup tax on revenues that citizens keep outside their home country.
"The major issue blocking the agreement was what Italy described as a political reservation," European Commission spokesman Mr Jonathan Todd told a briefing, adding that Rome said the planned rules would have a negative impact on its revenues.
Ministers are due to tackle the tax issues again late today at a dinner where talk will mainly focus on the economic fallout of war in Iraq.