France plan to bar low-tax EU statesfrom receiving aid funds

6th September 2004, Comments 0 comments

PARIS, Sept 5 (AFP) - French Economy Minister Nicolas Sarzozy said Sunday he plans to propose to his EU colleagues that the bloc's new members with lower than average tax rates be barred from receiving structural aid funds.

PARIS, Sept 5 (AFP) - French Economy Minister Nicolas Sarzozy said Sunday he plans to propose to his EU colleagues that the bloc's new members with lower than average tax rates be barred from receiving structural aid funds.  

"One can't allow in Europe that some countries say 'we're sufficiently rich to lower our taxes' - to as low as zero in some cases - but at the same time ask the countries of old Europe to pay structural funds that we could use for our regions," Sarkozy said in France's TF1 television.  

"I will propose that new members whose tax rates are lower than the EU average are no longer eligible to receive structural funds," said Sarkozy, who is due to meet with EU economy and finance ministers on Friday.  

The low corporate tax rates in several of the 10 countries which joined the European Union earlier this year has been a hot-button issue, with German Chancellor Gerhard Schroeder and French President Jacques Chirac vowing in May to work together to harmonise tax rates in order to prevent what they see as fiscal dumping rates by new member states.  

But tax harmonisation is opposed by other old EU members, especially Britain which is vehemently against alignment of tax rates.  

Tens of billions of euros are available to EU members every year for development projects designed to alleviate economic differences between the bloc's regions.  

Outgoing EU Budget Commissioner Michaele Schreyer said earlier this year that new members were not funding their tax advantages with EU funds, but warned them they would have to abide by the bloc's rules and raise matching funds for EU structural aid.

 

 © AFP

 

Subject: French News

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