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The Carousel fraud

Once Theresa May's government has defined her wishes for the future, Brussels will continue to put London in front of her own mirror

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The Carousel fraud

This Thursday's paper confirms and develops dark, baked omens in checkbook caucus a week ago. It contains poisonous elements, but packed with elegant rhetoric. It would seem destined to defy or party ( 27), that it is she who breaks and peche with burden of proof. But that's not going to happen. There will be no conflagration. No noise. Once residual government of Theresa May has defined her wishes for future, which is what was demanded of prodigal, Brussels will continue to put London in front of its own mirror.

That is, he will claim clarifications and details, he will write suggestions in minimalist appearance, but deep draft, so that Anglo-Saxon suit ir proposals to rule of Community law. This is Commission, heir to rooted Christian Democrat of most skilful vaticanism, and sharp calculation of interest of liberalism seasoned by social democracy.

Poisonous elements?

The worst is overall approach of document. It does not follow principle of globalising advantages and disadvantages in a balanced package for future United Kingdom-European Union (EU) relationship, but those of selecting only factors of its conveniences in relationship and disposing of uncomfortable, (pick and choose); or remove cherries and keep sweets (cherry picking). Thus, it seeks access to European continent of all British goods, in 96% of total without any tariff, as if United Kingdom continued on internal market. One way to aspire to keep linked to Ulster, and not to self-evict from Chains of industrial production (automotive...) European.

It also seeks to deal with near-European internal market for agri-food products (IT exports 65% of all foreign sales to union). But it does not offer it, conversely, in fishing, where its reserves are enormous, and will pass through negotiations Caudinas those who aspire to continue to fish in its waters: Today British fishermen catch re 90,000 tonnes/year and Europeans, 760,000: se will sweat Blood.

Because of se imbalances, May is forced to renounce appetizing European passport for banking and financial services: It risks city's loss of capital, and its inquina.

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The second worst is that concept of internal market that festers text is erroneously instrumental. This realization is but refinement — from 1992/95 — of common market, to which it added elimination of invisible barriers, partly thanks to excellent work of British Lord Cockfield. It seems a minor detail, but whole economic architecture of Union is built on it. One of most genuine, perverse and illustrative barriers caused carousel to be fraudulent.

When Jacques Delors finalized current Europe without Frontiers (internal), different models of value added tax (VAT) had to be adapted to avoid fractionation of that market, with traps. To make it unique, VAT/zero was instituted. When a company makes an intra-Community sale — within EU — VAT is returned to it, it supports a zero tax, subject to zero control. But if y mediate border controls, customs loopholes, re is a danger that every time re is a transaction re will be a return (or several, if it is a complex commodity).

The comings and turns of this mechanism were baptized with nickname of fraud of carousel. To illicit transaction goods of low weight/volume and high added value were better lent: millions of daily operations. This fraud was carried out through fictitious societies, falsified documents and border collusion. Over years it decayed. But if a double and complex customs filter is now introduced — as London proposes — risk of reactivating fraud is real. It would thus decay everything built since nineties.

In addition to this technical obstacle ( risks of massive abuse) for internal market and Auanera union, anor, political emerges. It would be indigestible for a third country to control and collect at home, on its behalf, customs duties for application of common external tariff. It's a matter of principle. Europe also wants to be sovereign in collection of its own foreign taxes (tariffs).

If to se problems it is added that, as has been said, United Kingdom's access to European internal market, which May is intended, is limited — agricultural goods and products —; Incomplete — no services —; and lame — of four freedoms, which extend circulation of goods to services, capital and people, it is verified how adolescent Reverie Brexitera becomes Roma.

Why? Why do Europeans intend to impose ir law, which new napoleons? No. Because this one is more accredited for years than a bundle of scattered norms. It operates on principle of universality: a person, like a pen, that a legal opinion or that an investment fund has same capacity to move in common space.

This simultaneity of four freedoms is nuclear. When some elements were allowed to circulasen with liberty and ors not; For example, when capital was given absolute freedom without — at one time — establishing harmonized taxation, that freedom unbalanceded previously harmonious ensemble. It triggered a downward tax race — towards defiscalization of money — and thus eroded sufficient funding from welfare state, whose bill was largely paid by today's declining capital taxes.

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