EU agrees voluntary air travel levy to fund aid

15 May, 2005

European Union finance ministers agreed on Saturday on a voluntary levy on airline tickets to fund extra development aid but only a handful of countries said they would definitely implement it. The optional charge on airline tickets falls short of what French President Jacques Chirac originally proposed with backing of German Chancellor Gerhard Schroeder. But it could break the ice on what might one day become a broader tax to help Africa. "This will be a voluntary contribution which some member states propose to turn into a mandatory contribution but we are leaving this open," said Luxembourg Prime Minister Jean-Claude Juncker, who chaired the talks among 25 EU finance ministers.
Five or 6 countries were ready to go ahead first, he said. Officials said the deal was embryonic but the basic idea was that each country could decide if it wanted such a tax. Payment might also be voluntary for travellers. The European Commission is to prepare a formal proposal for the ministers' next meeting on June 7, Juncker said.
Austrian Finance Minister Karl-Heinz Grasser attacked the scheme as a burden on consumers and a distortion of competition, saying EU countries were still "far away from consensus" and Austria would not take part.
Finland, Sweden, Italy and several new EU member states were also sceptical, officials said. Greece, a tourist destination that is one of the poorer EU countries, objected too. "We do not support it. It would penalise regions of the EU that are geographically disadvantaged... It would not be a good way to raise revenue to help developing countries," Georgios Alogoskoufis, Greece's finance minister, told reporters.
Rich nations have agreed to increase assistance to Africa and the developing world to 0.7 percent of gross national income by 2015, but with EU countries' average aid spending at roughly half that target, they need to raise extra money.
French Finance Minister Thierry Breton said no figure was set but people were thinking of a levy of up to 3 euros.

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