A lifeline has been thrown to the beleaguered European duty-free industry by Germany, which has backed a French call for a five-year extension to next June's deadline for abolition.
Germany takes over the EU Presidency at the end of the month and has pledged to take the issue up as part of its agenda.
With six countries expressing support for a review of the abolition decision at yesterday's meeting of EU Finance Ministers, the focus of the well-organised duty-free campaign is now on an extension of the deadline. Most campaigners concede that a total reversal of the decision is unrealistic.
Irish ministers, fearful of huge job losses among the 4,000 directly and indirectly employed in the industry in Ireland, were cautious, however. They warned that, although the tide may have shifted slightly in favour of duty-free, there is still huge opposition to overcome.
Even agreement to a longer transition period will involve persuading a deeply hostile Commission to make a proposal, and then require a unanimous vote from member states. Yesterday the Internal Market Commissioner, Mr Mario Monti, adamantly rejected the French case.
But last night campaigners were also drawing encouragement from new public support from the previously equivocal British Chancellor, Mr Gordon Brown.
Supporters of a longer transition period now include Ireland, France, Germany, the UK, Greece and Spain, while Holland, Portugal and the Nordic countries are most strongly opposed to reopening the issue.
The German commitment was warmly welcomed by a cautious Minister for Finance, Mr McCreevy, who said that although Ireland had been "to the van" in defence of duty-free, it had been clear for some time that many other countries would have to come strongly on board to achieve success.
The French Minister for Finance, Mr Dominique Strauss-Kahn, in what diplomats described as an impassioned appeal to fellow ministers, said that the case for abolition had been well made but further time was needed to prepare for the social consequences.
The German Secretary of State for Finance, Mr Heiner Flassbeck, the right-hand man of the powerful Minister, Mr Oskar Lafontaine, backed the French call for a stay of execution, complaining that the outgoing German government had done little to prepare for the change.
Editorial comment: page 15
Finance ministers at odds over tax harmonisation: page 16
