EU: Financial investors should pay new taxes to fund the European Union, Wolfgang Schüssel, the Austrian chancellor and new holder of the rotating EU presidency, said yesterday.
His proposal at the European Parliament for an EU tax on "short-term financial speculators" will be controversial, particularly in financial centres such as London.
Mr Schüssel wants to create a dedicated EU tax to avoid a repeat of last year's wrangling between member states over who should fund the union's €862 billion seven-year budget.
The Austrian chancellor also wants the European Commission to consider taxes on international air and sea travel in its review of the EU budget, due to be completed in 2008.
The idea of an EU tax has the backing of the commission and Angela Merkel, the German chancellor, but it would have to be agreed by all 25 member states.
A spokesman for Gordon Brown, British chancellor of the exchequer, said: "The UK government has consistently opposed an EU tax."
Setting out his plans for the six-month Austrian EU presidency, Mr Schussel said: "It can't be right that short-term financial speculation is not subject to taxation at all. It can't be that transport by air or by boat is not subject to taxation." His officials did not elaborate on what kind of speculation he had in mind, or whether he was suggesting a "Tobin tax" (excise duty on cross-border currency transactions).
Mr Schüssel's plan could have a disproportionate impact on the UK - which has Europe's biggest financial centre, busiest airport and major sea routes.
Martin Weale, the director of Britain's National Institute of Economic and Social Research, said: "I cannot think of an economist who is keen on the idea. Most people would say that speculation is something that you simply have to live with." An EU tax would simply shift speculation from Europe to the US, he added.
The EU receives about 75 per cent of its money direct from member states and 25 per cent from sources including customs duties and Vat.
Mr Schüssel's speech marked a shift in emphasis from the more liberal approach of last year's British presidency.
The Austrian chancellor said he would involve social partners - unions and employers - to hammer out a deal on an EU directive to liberalise the market in services, and to ensure it did not permit social dumping by companies in countries with lower labour and safety standards.
Mr Schüssel also called for a debate on the rulings of the European Court of Justice, which he believes sometimes impinge on national sovereignty.
A recent court ruling on the rights of foreign students to attend Austrian universities caused concern in Vienna, while rulings on corporate tax issues have irritated EU finance ministers.
The Austrian chancellor also promised to launch a debate on the future of the EU constitution which went beyond "elites".
The European Parliament yesterday voted against the €862 billion seven-year budget agreed by EU leaders last December.