European states could face 'EU tax' to redistribute wealth

European trade commissioner Cecilia Malmstrom attends the World Economic Forum (WEF) annual meeting in Davos. Photo: REUTERS/Arnd Wiegmann.

EU member states could face a controversial European “social tax” to redistribute wealth in years to come, according to a senior European official.

European trade commissioner Cecilia Malström said that a new tax by the EU on its member states could help “slice up the cake of globalisation.” Malström was speaking at the World Economic Forum summit in Davos, Switzerland.

But the Swedish official said she was personally sceptical about the idea, and gave no further details as to what shape the tax could take or who it might affect.

Malström made the comments at an event called “Putting Europe’s Union to the Test” at the WEF conference of global business and political leaders.

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The tax proposal came after she outlined how EU member states had lacked the “strength, will, or ability” to protect citizens from the damaging effects of globalisation.

“It’s up to member states to protect citizens. They haven’t made necessary reforms to slice up the cake of globalisation,” Malström said.

“They haven’t reformed social systems, tax redistribution, and invested in skill acquisition and education people need so they could move to different places.”

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“What Europe has tried to do recently is develop a social agenda. We’ve set standards and targets people could move towards, but this is controversial as — who’s going to fund it? We don’t have European taxation.”

Asked by the moderator if she favoured a European tax, she said, “I’m a bit sceptical about it. But it’s something that could be discussed in coming years.

“It’s something we could look at. We could talk about a social tax — it might be one way to do things.”