EU plane tax talk jars
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EU plane tax talk jars
By Krista Hughes
BRUSSELS (Reuters) - Austria's finance minister has clashed with Germany by suggesting airlines could be taxed to fund the EU's budget as well as aid for Africa and other poor regions as Berlin and Paris are suggesting.
Karl-Heinz Grasser raised the idea on the sidelines of talks in Brussels where European Union finance ministers agreed to commission a study into a tax on jet fuel or plane tickets.
Grasser said such a tax would save Austria 200 million euros a year, or 10 percent of its contribution towards the central EU budget. EU member states are in a heated debate over the size of the EU budget that runs from 2007-2013.
"I personally would support such a measure because we have to see how we will finance Europe," Grasser told a news conference.
"I would prefer to finance Europe through a kerosene tax, that the population will not really notice because it goes through plane tickets, than financing Europe through a measure that will really impact on people."
Half of the proceeds from such a tax could fund development aid and the rest the EU budget, Grasser said.
EICHEL INSISTS EUROPE SHOULD HELP DEVELOPING WORLD
German Finance Minister Hans Eichel immediately criticised Grasser's idea.
"That's not my position, I advise against broadening the discussion in this way because that would prevent a result being achieved," he told reporters, defending the idea that Europe could go it alone if other regions refused.
"Europe can and should make a contribution to development policy but it can only do it if it is solidly financed ... you can't always wait for the whole world to join you."
"With the help of this tax we can further development without burdening national budgets," he said.
Grasser said a tax on fuel could raise 18-20 billion euros (12-14 billion pounds) a year based on OECD estimates and a 2002 kerosene usage of some 60 billion litres.
"But we are only at the start of the debate ... the best-case scenario would be for the USA to join as well," he said.
The levy was proposed by French President Jacques Chirac ahead of a meeting of G7 economic powers earlier this month as a way of meeting Europe's promise to raise development aid.
Washington has not and is not expected to support the idea. Within the EU, and a European official said this week Ireland, Spain and most likely Italy would oppose it and that Britain was cool to the idea but unable to say so because it was pushing for aid to Africa as chair of the G8 club of rich nations..
Airlines are worried that a tax could hit them at a time of cut-throat competition from low-cost carriers, not to mention the lingering impact of the September 11, 2001 hijacked airliner attacks in the United States.
Eichel said flights within Europe were cheap.
"When I take a taxi to Berlin airport it is almost more expensive than flying from Berlin to London," he said.
Greek Finance Minister George Alogoskoufis sounded a very cautious note on the tax idea, saying it could hurt tourism.
"The impact should be studied very, very carefully. The study should take into account the impact on countries that depend on tourism," he said.
"We should not be helping the poor countries in the world by taxing the poor countries of Europe. We reserve our judgment on this tax."
© Reuters 2005. All Rights Reserved.
BRUSSELS (Reuters) - Austria's finance minister has clashed with Germany by suggesting airlines could be taxed to fund the EU's budget as well as aid for Africa and other poor regions as Berlin and Paris are suggesting.
Karl-Heinz Grasser raised the idea on the sidelines of talks in Brussels where European Union finance ministers agreed to commission a study into a tax on jet fuel or plane tickets.
Grasser said such a tax would save Austria 200 million euros a year, or 10 percent of its contribution towards the central EU budget. EU member states are in a heated debate over the size of the EU budget that runs from 2007-2013.
"I personally would support such a measure because we have to see how we will finance Europe," Grasser told a news conference.
"I would prefer to finance Europe through a kerosene tax, that the population will not really notice because it goes through plane tickets, than financing Europe through a measure that will really impact on people."
Half of the proceeds from such a tax could fund development aid and the rest the EU budget, Grasser said.
EICHEL INSISTS EUROPE SHOULD HELP DEVELOPING WORLD
German Finance Minister Hans Eichel immediately criticised Grasser's idea.
"That's not my position, I advise against broadening the discussion in this way because that would prevent a result being achieved," he told reporters, defending the idea that Europe could go it alone if other regions refused.
"Europe can and should make a contribution to development policy but it can only do it if it is solidly financed ... you can't always wait for the whole world to join you."
"With the help of this tax we can further development without burdening national budgets," he said.
Grasser said a tax on fuel could raise 18-20 billion euros (12-14 billion pounds) a year based on OECD estimates and a 2002 kerosene usage of some 60 billion litres.
"But we are only at the start of the debate ... the best-case scenario would be for the USA to join as well," he said.
The levy was proposed by French President Jacques Chirac ahead of a meeting of G7 economic powers earlier this month as a way of meeting Europe's promise to raise development aid.
Washington has not and is not expected to support the idea. Within the EU, and a European official said this week Ireland, Spain and most likely Italy would oppose it and that Britain was cool to the idea but unable to say so because it was pushing for aid to Africa as chair of the G8 club of rich nations..
Airlines are worried that a tax could hit them at a time of cut-throat competition from low-cost carriers, not to mention the lingering impact of the September 11, 2001 hijacked airliner attacks in the United States.
Eichel said flights within Europe were cheap.
"When I take a taxi to Berlin airport it is almost more expensive than flying from Berlin to London," he said.
Greek Finance Minister George Alogoskoufis sounded a very cautious note on the tax idea, saying it could hurt tourism.
"The impact should be studied very, very carefully. The study should take into account the impact on countries that depend on tourism," he said.
"We should not be helping the poor countries in the world by taxing the poor countries of Europe. We reserve our judgment on this tax."
© Reuters 2005. All Rights Reserved.
Transparency International
ATWOnline February 16, 2005:
EU jet fuel tax gains momentum, but may be derailed
EU jet fuel tax gains momentum, but may be derailed
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Add to this yesterday's announcement that travellers within Europe are to be compensated for delays or failures to reach their destinations and you have a really interesting future for European airlines....
I look forward (definitely NOT!) to a major weather delay involving a large raft of A380s when every pax affected gets his or her 350 Euros compensation, and I look forward to the Eurocrats explaining to their electors why their airfares suddenly went stratospheric.
But silly me, I forgot.... those same Eurocrats will simply enact legislation forbidding airlines from increasing their fares to cover such costs.
Talk about Alice in Wonderland.....
I look forward (definitely NOT!) to a major weather delay involving a large raft of A380s when every pax affected gets his or her 350 Euros compensation, and I look forward to the Eurocrats explaining to their electors why their airfares suddenly went stratospheric.
But silly me, I forgot.... those same Eurocrats will simply enact legislation forbidding airlines from increasing their fares to cover such costs.
Talk about Alice in Wonderland.....
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Europe has gone mad... Am I understanding this correctly? We're going to tax kerosene to help pay for 3rd world countries???... AND we'll ask the USA if they're willing to join???? Yeah, right... that'll happen... in la-la land. HELLO! The airline industry is going down the tubes, mr/mrs Euro-commissioner! No need to speed things up by taxing an already crippled sector.
It's absolutely rediculous that a return trainticket for a 10 mile journey is more than 5 times as expensive than a 400 mile trip by airplane. LCC's might have enabled many to travel conveniently by air but they've ruined the industry as a whole. Plane tickets ought to be expensive because it is an expensive way to travel!
It's absolutely rediculous that a return trainticket for a 10 mile journey is more than 5 times as expensive than a 400 mile trip by airplane. LCC's might have enabled many to travel conveniently by air but they've ruined the industry as a whole. Plane tickets ought to be expensive because it is an expensive way to travel!
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I read about the EU Commissioners' decision that airlines would have to compensate travellers if they did not get them to their destinations on time. Could someone corrct me if I'm wrong, but does that mean a pax can buy a E9.99 airfare with RyanAir and be 'compensated' to the tune of E350.00 if the plane arrives late due a tech problem or a weather diversion?
If so, there is a Santa Claus, and he lives, not at the North Pole, but in Brussels.
If so, there is a Santa Claus, and he lives, not at the North Pole, but in Brussels.
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So they're talking 30 cents (Euro) per litre of fuel??
Surely this'll cripple all of Europes' airlines overnight?
Karl-Heinz Grasser - if you've never heard of him do some reading up on him, hard to see how a man with his extremist views ended up in that position, make Ken Livingstone look sane!
Edited for PP Spelling
Surely this'll cripple all of Europes' airlines overnight?
Karl-Heinz Grasser - if you've never heard of him do some reading up on him, hard to see how a man with his extremist views ended up in that position, make Ken Livingstone look sane!
Edited for PP Spelling
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does that mean a pax can buy a E9.99 airfare with RyanAir and be 'compensated' to the tune of E350.00 if the plane arrives late due a tech problem or a weather diversion?
What we need is a web site so that if one pax finds out the truth about a particular flight they can share the info with other pax on the same flight.
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What a great way to reward possibly the most dynamic industry sector... give it some more hurdles... what on earth are these people on?
So u would have thought if we are going to be the EU's new cash cow that it means that they would help the industry and protect it, but these twits are even too narrow minded to do that.
I propose all airlines get together and everytime one of these stupid bloody rules is discussed we have a mass grounding across europe - then they will realise what an important job we do to the whole flow of europe and maybe start thinking twice.
So u would have thought if we are going to be the EU's new cash cow that it means that they would help the industry and protect it, but these twits are even too narrow minded to do that.
I propose all airlines get together and everytime one of these stupid bloody rules is discussed we have a mass grounding across europe - then they will realise what an important job we do to the whole flow of europe and maybe start thinking twice.
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Just put a ban on any MEP or their eurocrat entourage from flying. They will soon see the light.
Aviation is very important for our econmies and buisness / lesiure time, not an easy tax source for the most inefficent group of spongers in europe.
Aviation is very important for our econmies and buisness / lesiure time, not an easy tax source for the most inefficent group of spongers in europe.
