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Petr Mach: How to read the Lisbon Treaty

The European Journal, July 2008, 04.07.2008

published: 04.07.2008, read: 9508×

 

If one wants to learn what the Lisbon Treaty is really about, reading the treaty itself is insufficient. Reading consolidated version of the current treaties (where amendments of the Lisbon Treaty are incorporated) is also insufficient.

One must compare individual articles of the Lisbon Treaty with individual articles of the current treaties. The Czech government (similarly as governments in other EU member states) did not introduce to the parliament the consolidated version of the Treaty with specifying what was dropped and what was added as it is common with ordinary bills. Thus the government is in fact selling a pig in a poke.

Let’s show an example. Paragraph 79 on page C306/70 of the Lisbon Treaty says:

"At the end of Article 93, the words within the time limit laid down in Article 14 shall be replaced by and to avoid distortion of competition."

Seemingly an innocent sentence. Something about avoiding distortion of competition. After all – who would object to avoiding distortion of competition!? But-First we must understand that the above mentioned article 93 is that of the Treaty establishing the European Community which says:

"The Council shall, acting unanimously on a proposal from the Commission ...adopt provisions for the harmonisation of legislation concerning turnover taxes, excise duties and other forms of indirect taxation to the extent that such harmonisation is necessary to ensure the establishment and the functioning of the internal market within the time limit laid down in Article 14."

Thus a seemingly inconspicuous sentence somewhere in the middle of the Lisbon Treaty abolishes the time limit within which the EU can harmonize indirect taxes, which as we could see in the article 14 has expired! The new sentence would also enable the Council of Ministers to adopt directives on minimum rates of taxes and excise duties upon a claim that the current rates distort competition. If the Lisbon treaty is ratified one should not wonder when the Commission proposes, say, increases in minimum VAT rate from 15 to 19 (currently basic rate in Germany or France) pointing that British 16 or Luxembourg 15 per cent represent "harmful tax competition" and "distort competition" in the single market.

Shall we then solace ourselves at least by the fact that the EU needs unanimity in the Council of Finance ministers in order to adopt such a directive? Precociously. Another series of inconspicuous paragraphs in the Lisbon Treaty enables shifting taxation from unanimity to majority voting.

The Lisbon Treaty (on page C306/43) says, that in the article 93 the words "acting unanimously on a proposal from the Commission" shall be replaced by "acting unanimously in accordance with a special legislative procedure" and then (on page C306/39): "Where the Treaty on the Functioning of the European Union provides for legislative acts to be adopted by the Council in accordance with a special legislative procedure, the European Council may adopt a decision allowing for the adoption of such acts in accordance with the ordinary legislative procedure." Keep on mind that the words "ordinary legislative procedure" in the Lisbon Treaty mean majority voting while the "special legislative procedure" means unanimity.

Can we then at least believe that our prime minister will never agree to a proposal that would shift taxes from unanimity to majority voting? Hardly. In comparison with signing the whole Lisbon treaty, which enables all this, a single voting in the European Council is a bagatelle. A Prime Minister who easily signs the Lisbon Treaty can - one late night of a Council summit - even more comfortingly support a proposal like "decisions according article 93 (113) shall be adopted in accordance with the ordinary legislative procedure".

Purpose of this article is not to describe all the changes included in the Lisbon Treaty. We have just shown a small example whereas the Lisbon Treaty is full of similar "innocent" provisions.

Petr Mach is executive director of the Center for Economics and Politics, a think tank in Prague, and an advisor to Czech President Vaclav Klaus.

Written in May 2008. Published in The European Journal, July 2008

http://www.europeanfoundation.org/journals.html

Petr Mach

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