Wednesday, June 15, 2005

Opposition accuse PSOE Government of “osmosis” tactics

Ecofin row

GSLP/Libs has declared that the intervention last week of Spain's Finance Minister Pedro Solves in ECOFIN is "unprecedented and incomprehensible".

According to the Opposition, Sr Solves' call for the dismantling of the local tax-exempt company suggests that Spain's long-term strategy is to get the Rock to abandon its fiscal system and reposition the economy by integrating it with the Campo on the basis that our current EU terms were unsustainable.

According to Leader of the Opposition Joe Bossano, this is no different from the "osmosis" policy launched by Fernando Moran under the 1985 Brussels Process.

"It would appear that nothing has changed notwithstanding the claims of good neighbourly relations emerging from the innovative tripartite forum," he said.

An Opposition statement declared:

"Spanish Finance Minister Pedro Solves has at best, displayed an astounding level of ignorance on Gibraltar before ECOFIN last week. For someone who is also Deputy Prime Minister of Spain, Mr Solves has shown that he is very badly informed on Gibraltar's position as a finance centre.

The Spanish Government's position was expressed in the meeting of ECOFIN which approved a declaration on the Code of Conduct with regards to tax regimes in different Member States. ECOFIN is the Council of Ministers for the Economy of EU Members and includes the UK Chancellor of the Exchequer.

Mr Solves said that UK has to dismantle the tax-exempt company structure in Gibraltar as it had committed itself to doing. This is in flat contradiction to the statement made by the Gibraltar Government in the past, namely that UK supported the Gibraltar Government in the view that the exempt company could not be dismantled, to use Mr Solves' terminology, until there was a replacement structure.

Furthermore the replacement structure which was proposed, was to do away with the Exempt Company because company tax was to be abolished and therefore there was nothing to be exempt from. This also, it was said, has the approval of the UK Government. It received the green light from ECOFIN in the past with no objection from Spain, according to the information provided by the Gibraltar Government.

The current dispute over exempt companies was supposedly with the European Commission and not with ECOFIN, which had given the go-ahead to the new scheme which, it was said in Gibraltar at the time, should help to get the scheme past the Commission.

It will be recalled that the Commission in fact turned the new scheme down, and that this is being challenged in the European Courts. The Commission, last December, proposed a gradual run-down of the tax exempt companies until 2010 which included licensing new ones to replace some of those leaving but not in equal numbers.

Against this background, which sketches the main features of the public debate on these issues over the past few years, the intervention of Spain in ECOFIN is unprecedented and incomprehensible. It suggests that the long-term strategy being pursued by the current Spanish Government is no different from the one set in motion as part of the Brussels process in 1985 by the then Foreign Minister Fernando Moran which he termed "osmosis".

This also was the underlying theme of the relaunched Brussels talks under Mr Pique, which received EU backing in Barcelona, and which was about abandoning Gibraltar's fiscal system and repositioning the economy by integrating it with the hinterland on the basis that our current EU terms were unsustainable. It would appear that nothing has changed notwithstanding the claims of good neighbourly relations emerging from the innovative tripartite forum."

0 Comments:

Post a Comment

<< Home