|Earlier this week, the Belgian government announced its intention to block the agreement reached by member states concerning Italian milk quotas - an issue that had stalled the final agreement of the European Savings Tax Directive for some time - unless the European Commission supports its demands over a domestic tax issue.
According to a report on the European Union news website Euractiv.com, Belgium is seeking a guarantee that Commission will not take legal action against it for extending a special tax regime for Belgian firms known as 'co-ordination centres'. Under Belgian law, such companies are charged a lower rate of tax, and the Belgian authorities want to be permitted to extend this until 2005.
A Belgian official was quoted by Euractive as announcing that "Unless we receive this assurance we will block the formal decision on the co-ordination centres and the milk quotas." After the intransigence demonstrated by the Italian delegation over the milk quota issue, which threatened to derail the European tax package negotiations, a Commission spokesman was quoted as saying this week that the issue would never again be hijacked by a single member state.