Germany aims to end British veto on taxes

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TONY BLAIR'S European strategy was placed under further pressure yesterday as Joshka Fischer, the German Foreign Minister, outlined his government's ambition to end Britain's right to veto tax harmonisation.

Mr Fischer told the European Parliament the aim of the German government was to limit the principle of unanimous voting to fundamental constitutional decisions.

European integration had to be pursued, he said, to embrace such areas as taxation, particularly since the launch of the single currency. "Economic and monetary integration is largely completed with the introduction of the euro. Only a few areas are lacking, such as closer harmonisation of tax policies as advocated by Germany."

Germany took over the presidency of the European Union from Austria on 1 January and has set a deadline at the end of March for agreement on a sweeping package of budgetary and policy reforms aimed at preparing the bloc for expansion eastward.

But Mr Fischer said the failure to streamline the EU's decision taking mechanisms ahead of enlargement would drive the bloc into paralysis and collapse. He said the conclusion of the Agenda 2000 spending negotiations in March must be followed by agreement at a summit in Cologne in June on the timing of a new constitutional conference to rewrite the EU's voting rules.

"The key question here is the Union's readiness to accept majority decisions in as many areas as possible," Mr Fischer told MEPs. "The new federal government advocates limiting the need for unanimity in the longer term to questions of fundamental importance such as treaty amendments."

Europe now needs its own constitution, he said, if it is to achieve the "ultimate goal" of political union.