Common EU army is Fischer's goal

GERMANY'S NEW Foreign Minister, Joschka Fischer, reignited the debate over the EU's future yesterday, describing political union, including the creation of a European defence force, as his personal goal.

Asked in a newspaper interview about the possibility of a common European army, Mr Fischer replied that, when "full union" took place, foreign and security policy would become a community matter.

"Just as we worked together on the first real transfer of sovereignty in the field of currencies, we ought to work on a common constitution to turn the European Union into an entity under international law," he told the Frankfurter Rundschau. "That is my goal. It is the decisive task of our time."

Mr Fischer, a Green who joined the government last month, said that the nucleus of sovereignty should be money, a constitution, basic law and internal and external security.

But he added that Europe "will never become a homogeneous nation state, because we differ in our peculiarities, languages, history, prejudices, passions and animosities".

His comments follow a call for moves towards corporate tax harmonisation from Germany's new Finance Minister, Oskar Lafontaine, which provoked a clash with the British Chancellor, Gordon Brown.

Mr Fischer's comments will alarm Downing Street, already anxious about a pledge from the new Chancellor, Gerhard Schroder, to push ahead with European integration during its six-month EU presidency beginning in January.

Amid mounting speculation in Brussels about a new push to harmonise corporate tax rates, Mario Monti, European Commissioner for the internal market, said he is "not proposing a minimum rate of corporation tax at the moment".

But Mr Monti called for greater co-ordination of VAT rates, excise duties and energy duties, and said governments and companies may push for pan- European measures on business taxes after the single currency kicks in next year.

The renewed political turbulence over tax was fuelled on Monday by Mr Lafontaine, who said harmonisation of corporate tax and moves against tax havens would be a priority when Bonn takes over the EU presidency. France's Finance Minister, Dominique Strauss-Kahn, and the Italian Prime Minister, Massimo D'Alema, have endorsed the idea.

Mr Monti's intervention was designed to lower the temperature amid a growing rift between socialist finance ministers and Mr Brown. Mr Brown has threatened to veto any moves to harmonise taxes, which would have to be agreed by all 15 EU countries.

Instead of extending its ambitions, the Commission has decided to use the new political climate to try to push through the measures it has on the stocks. These include a code of conduct, designed to stop countries luring investors through preferential tax regimes, and a more controversial minimum tax on savings. This proposal, aimed at preventing EU nationals taking advantage of low rates in other European countries, is opposed by Britain.

However, Mr Monti argued that his package had growing support and said it was important "not to destabilise this consensus" by embarking on new measures. Asked whether EMU would lead to more calls for harmonisation, he replied: "Once the euro is in place the dynamics may well be greater."

Niall Ferguson,

Review, page 4