Europeans face down air tax for development funds suggestion

An idea to charge air passengers a tax as a way of raising money for European development has caused a rift between finance ministers of the European Union’s members.

First proposed in January at the World Economic Forum by the French, as an aviation tax of $1 per ticket, such a tax could potentially raise $10 billion (€7.9 billion, £5.4 billion) per year to fund development projects.

A discussion paper before this past weekend’s meeting of EU finance ministers had suggested a tax of €10 per ticket on flights within the EU and €30 per ticket on flights to non-EU destinations.

Only France and Belgium said they were prepared to commit to a mandatory airline tax, however. Other nations, mostly those with large tourist industries, were generally opposed to the idea.

The Austrian finance minister, for example, said that he could not support such a proposal because it would hurt consumers and distort competition.

Several officials said that no agreement was likely on the proposal unless the amounts of the tax werelowered. Lowering the amounts, however, would tend to dilute the usefulness of the tax in funding development.

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