Former Prime Minister and Maltese MEP Alfred Sant told the European Parliament that it would be a pity if EU competition policy ends up being driven by the urgings of tax populists, who he says are pushing for the harmonisation of tax policies and have no problems with using competition policy to achieve this.

Alfred Sant, addressing the European Parliament as S&D rapporteur on the Annual Report on Competition Policy, said this approach could serve to perhaps screen another reality. He said that at a time when European economies are again growing well, working and middle class people as well as pensioners are not being compensated for the sacrifices they had to make during the years of austerity. "They will not be consoled by being told that in the interests of competition, taxation within the Union should be harmonised."

Dr Sant said that increasingly, competition policy is taking a greater importance in the EU's profile.

"One hopes that this is not happening for the wrong reasons." he said.

The Maltese MEP said that in principle, competition policy is meant to ensure that free market rules apply to the benefit of consumers all over Europe. "In practice, given that historically the role of national governments has been a crucial element of European economic development, the focus has frequently been - still is - more on questions relating to state aid than on matters arising from corporate competitive strategies."

"In this, it has been difficult to avoid one-size fits all approaches that failed to discriminate sufficiently between north and south, island and metropole, peripheral and central."

Dr Sant said that the privatisation of major infrastructural functions, such as in transport and utilities, and now public health, has simply been seen as economically desirable if cast in competitive format. "But the social impacts, as well as some economic ones, have not been given sufficient attention."

"Now, the emphasis is also shifting towards state aid considerations with regard to taxation policies. Such policies are still subject to the sovereignty of member states but competition policy is being deployed to oversee and correct for them. One gets the impression in fact that the rules and methods by which this is done are being created on the hoof, actually on a case by case basis."

The Maltese MEP said tax flexibility within member states under conditions of full transparency should be considered an integral part of the competitive situation and is vital for the prosperity of smaller member states in the single market.

The report was approved with 445 votes in favour, 104 votes against and 38 abstentions.