Why Malta Should Abstain on the EU Tobacco Excise Directive
By Donato Raponi, Former Head of the VAT Unit, European Commission
Progressive politics is about more than adopting ambitious policies or using the right political language. It is about making mature decisions, recognising the bigger picture and understanding when national interests can be protected without standing in the way of collective European progress.
On Monday 9th November, EU Finance Ministers will be discussing the proposed revision of the Tobacco Excise Directive at the ECOFIN meeting. And just as with last week’s progressive budget, Malta has another opportunity to demonstrate precisely this kind of political maturity.
The most progressive decision the Government, and particularly the Minister of Finance, could take at this stage would be to abstain from the proposed agreement on minimum excise rates.
Malta’s concerns are legitimate and should not be dismissed because these raise important questions about the impact of harmonised taxation on smaller economies because measures that may appear reasonable at EU level do not necessarily have identical economic consequences for every Member State. This is why Malta must retain the right to articulate these concerns and defend its national economic interests.
A measure that may appear reasonable at EU level does not necessarily have identical economic consequences for every Member State and this is why Malta must retain the right to articulate these concerns and defend its national economic interests.
However, there is an important distinction between disagreeing with a European proposal and preventing the rest of Europe from moving forward.
The Directive seeks to modernise a taxation framework that has not kept pace with the changing tobacco and nicotine market. Addressing differences in taxation, responding to new products and ensuring that minimum excise requirements remain relevant are legitimate European policy objectives. Member States have spent considerable time negotiating compromises, and the Presidency is now seeking to bring this process to a conclusion.
Malta should not underestimate the value of reaching a European agreement, even where that agreement does not fully reflect its preferred position.
Abstention offers a sensible middle ground. Under the EU’s unanimity rules for taxation matters, a Member State can abstain without preventing the adoption of an agreement. This would allow Malta to formally maintain its reservations, communicate its concerns and protect its negotiating position, while avoiding the political consequences of being the country that blocks progress.
There is also a wider political consideration. Malta is a small Member State whose influence in European affairs depends not only on defending its interests but also on building relationships, credibility and constructive alliances. Being consistently willing to engage in compromise, where appropriate, strengthens rather than weakens that influence.
Other Member States have also expressed reservations about aspects of the proposed Directive. Sweden, for example, has raised concerns about the proposed taxation of nicotine pouches and the broader implications of the new taxation framework. The Swedish position offers an interesting example of how a Member State can maintain its reservations while exploring a constructive way forward.
For Malta, this is an opportunity to recognise that defending national interests does not necessarily require blocking European agreement. Sweden’s approach could offer useful lessons in balancing legitimate national concerns with the broader European interest in reaching a compromise.
Being progressive is about finding solutions, not simply maintaining positions. It is about balancing conviction with pragmatism, national interests with European responsibilities, and political principles with the realities of negotiation.
The Minister of Finance has an opportunity to demonstrate that Malta can be firm without being obstructive, critical without being confrontational, and progressive without having to agree with everything on the table.
Abstaining would not mean surrendering Malta’s position but recognising that sometimes the most progressive thing a country can do is to disagree, make its reservations clear and still allow Europe to move forward.
