The purpose of the report is to give an overview of economic literature on three questions: the risk of tax competition between European countries; the welfare effects of a possible tax competition; and the possibilities of correcting any such development through tax harmonisation. The author contends that there are two points of view for those who welcome globalisation and tax competition.
When the European Convention began its work, the open method of coordination (OMC) was not one of the central issues. However, open coordination cropped up in different working groups of the Convention, slowly but steadily.
In connection with the conclusions reached at the meeting of the European Council in Nice in 2000, it was stated that a clearer distribution of decision-making powers between the EU and its member states should be discussed. A catalogue of competences defines who, or which level, has the authority to make decisions on specific matters.