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Europe

Germany Warns New EU Members Over Tax Policies

In a rare show of unity, German Chancellor Gerhard Schröder and his conservative opponent Edmund Stoiber have blasted new EU member states for policies of tax-dumping and unfair tax competition.

The 10 new countries entering the EU by May 1 cannot on the one hand destroy their state income with low taxes and on the other hand build up their infrastructure using aid from the EU, Schröder and Stoiber said, according to Frankfurter Allgemeine Zeitung newspaper. Social Democrat Chancellor Gerhard Schröder said that it was out of the question that "Germany as the biggest net payer of the EU has to finance unfair tax competition against itself." Stoiber, Bavaria's prime minister and Schröder's challenger in the last elections, agreed. "What we do not accept is furthering the relocation of jobs mainly financed by German tax measures," he said. The German politicians echoed earlier comments from Swedish Prime Minister Göran Persson during a recent visit to Berlin. Persson argued that Sweden is not prepared to pay for new member states via EU contributions when the people earning most in these countries are not taxed or taxed at a very low rate. (EUobserver.com)

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