Awaiting a response

Spain’s busy goading the US again, this time by petitioning the European Commission to activate its Blocking Statute, which protects European businesses and individuals from foreign sanctions - in this case those imposed by Donald Trump on members of the International Criminal Court (ICC). The timing of this demand is somewhat awkward, as the same EU body has just threatened Madrid with legal action over its tax treatment of non-resident property owners.

Brussels’ legal challenge to Madrid will be welcomed by anyone who was appalled by Pedro Sánchez’s proposal to impose a 100 per cent tax on non-EU residents buying homes in Spain. In a written judgement, the EU Commission has questioned regulations that require non-resident owners in Spain to pay income tax on their properties, even if they aren’t being rented out.

The Commission argues that, by acting as a deterrent to EU citizens considering a property purchase in Spain, such rules might infringe European laws ensuring the free movement of capital and nondiscrimination. Spain has two months to justify or amend the legislation, or the case might be taken to the European Court of Justice.

If this regulation is of questionable legality, Sánchez’s 100 per cent tax proposal - made last January, in a misguided attempt to combat the housing crisis - surely has no chance of becoming law. Of course his government could argue that, because it would only apply to non-EU citizens, it would lie beyond Brussels’ remit. Sánchez would effectively be saying: “Don’t worry, we’re not discriminating amongst EU citizens, just against non-EU citizens.” But discrimination - in this case against Spain’s non-resident property owners, who may or may not be EU citizens - is partly why the current legislation is being challenged by the EU. It could also be argued by the Commission that any law that acts as a deterrent to property investment in an EU member state, as the 100 per cent tax proposal certainly would, is well within Brussels’ remit.

As it prepares its response to Brussels, the Spanish government is waiting on one from the same source. Madrid’s demand that the EU activate the Blockage Statute is one of several that have been made since early last year, when Trump began imposing sanctions on ICC members investigating Israeli and American citizens for war crimes (neither the US or Israel are members of the ICC).

The EU Parliament has twice passed resolutions requesting that the Commission protect ICC judges and prosecutors against what it sees as Trump’s attempt to secure legal immunity; but the Commission has refused to budge, without explaining why.

Both Brussels’ and Madrid’s demands are, at root, attempts to stop discriminatory treatment - in one case against non-resident property owners, in the other against lawyers with the temerity to question Trump. Hopefully both receive the result they want.