Britannia Radio

Here's Merkel and Sarkozy saying that to cut VAT is a waste of effort 
- and money!

Well, we've been telling Brown-Darling that too!    Anyway that's his 
pretence of 'leading the world'  blown out of the water.

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EU OBSERVER   24.11.08
France and Germany not to follow Britain in cutting VAT
ELITSA VUCHEVA

Cuts to value-added tax as a response to the financial crisis and a 
means to boost the economy are not appropriate for Germany or France, 
German Chancellor Angela Merkel and French President Nicolas Sarkozy 
said on Monday (24 November) in Paris.

"A general cut in VAT is the response chosen by some countries but is 
not the right answer for France and Germany," Ms Merkel was reported 
as saying by French news agency AFP.

She said France and Germany would hold more talks on how to provide 
"targeted aid" instead.

Mr Sarkozy echoed the German chancellor's position. "When we lower 
the VAT, what does that bring? Only lower prices. We think other 
measures, such as emphasising innovation and research, would be more 
effective for our economies," German agency DPA reports.

The Franco-German meeting in Paris came just hours before Britain was 
due to unveil a cut to the UK VAT from 17.5 percent to 15 percent.

The VAT stands at 19.6 and 19 percent in France and Germany, 
respectively.
"The risk that we are running today, taking into account information 
that is not always easy [to interpret], is that we mistake haste for 
action," Ms Merkel said.

The two leaders also reaffirmed the willingness they had expressed 
earlier to help getting Europe's car-makers back on their feet.
"Our determination to help European industry and notably the 
automobile industry is total and that is a point on which we agree 
completely," the French president said.

'Not a cent more'
Despite their unanimity on these issues, however, Mr Sarkozy did not 
manage to increase Ms Merkel's enthusiasm for a Europe-wide plan to 
boost the economy, which the European Commission is to unveil on 
Wednesday and which is expected to be worth some ?130 billion.

The French president said that the two countries agreed on the need 
for measures to resist the economic crisis, but added: "France is 
working on that, Germany is thinking about it."

For her part, Ms Merkel replied: "We will have many joint discussions 
yet, about thinking as well as about negotiating."

She was categorical, however, that Germany - Europe's biggest economy 
- was not to spend "a cent more" than what it is already contributing 
to boost the bloc's economic performance.

Her government earlier this month unveiled a ?32-billion plan - 
amounting to around 1.3 percent of Germany's GDP - for its economy, 
including
measures such as tax cuts, infrastructure projects and cheap 
corporate loans.

The plan the commission is to present on Wednesday will be discussed 
by EU leaders during their meeting in Brussels on 11-12 December.