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Image header Agence Europe
Europe Daily Bulletin No. 9789
GENERAL NEWS / (eu) eu/economy

France, Germany and coordination of national measures

Brussels, 24/11/2008 (Agence Europe) - Although the United Kingdom is expected on Monday to confirm its intention to temporarily cut its VAT rates (from 17.5% to 15% over two years), this measure is not expected to be copied by France or Germany. At the end of her meeting with Nicolas Sarkozy on Monday 24 November in Paris, Angela Merkel declared to the press that, “a general cut in VAT, perhaps the answer in some countries, is not the correct response for France or Germany”. Although the British approach is not being emulated by Paris or Berlin, it is not being derided either. Two days away from the Commission's presentation of its economic recovery plan, the French president pointed out the characteristics of a European response based on coordination of national measures. Following the tenth Franco-German Council, Mr Sarkozy stressed that, “We want to act rapidly and forcefully to help the European economic relaunch appropriate to each country, based on each country but coordinated…” Ms Merkel confirmed that, “it would be disastrous…if there were no European response”. Merkel was especially concerned about the need to take measures that did not, “cost member states money”, such as making certain rules on Small and Medium-sized Enterprises more flexible”. Defending the raft of measures put in place by her government, such as the suspension of the vignette in Germany and tax breaks for artisans, the German Chancellor said that she was in favour of targeted aid but without specify what aid. Mr Sarkozy said that there was, “agreement on the need to take other measures…France is working on it, Germany is thinking about it”. Ms Merkel explained that, “we are acting and thinking at the same time”. (A.B./trans/rh)

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