BRUSSELS, May 18: A member of the European Commission took issue publicly on Saturday with proposals by the executive body’s internal market commissioner Frits Bolkestein for closer harmonisation of taxes within the European Union.

Philippe Busquin, a Belgian socialist who holds the research portfolio, told Belgium’s De Morgen newspaper in an interview the EU needed to take greater stock of social considerations when shaping policies.

EU Member states are played against each other in terms of taxes. Do we have to take to reach extremes in terms of tax competition in the single market?, Busquin said.

Mr Bolkestein supports this view. I say that I am clearly opposed. It is time we conduct a fundamental debate on the issue.

Bolkestein, a former leader of the Dutch Liberal Party (VVD) and the EU’s top official for tax and financial issues, is trying to reduce tax differences in the 15-nation EU states to boost cross-border investments and raise competitivness.

Industry backs the attempt as it believes more tax competition would bring down tax rates. But Busquin said lower tax revenues may result in lower government spending for health and education.

He said EU policies were in general becoming too liberal and cautioned against copying the US model to raise the bloc’s growth and competitivness.

We have to watch out with liberalising and privatizing, Busquin said. We shouldn’t trail the United States in a ideologically simplistic way. There are other options.

It was the latest spat in the Commission which has appeared divided this year on issues ranging from a potential ban on tax breaks to road hauliers to a decision to delay the EU’s forthcoming new fishery strategy.

Unanimity is not required in decisions by the 20-member Commission , but disunion can slow down the European Union legislative process.—Reuters