France and Germany are to adopt a common corporate tax system by 2013, in an effort to signal greater co-ordination of economic policy after confidence in the euro was buffeted by the sovereign debt crisis.
Following a meeting in Paris that coincided with the publication of second-quarter growth figures showing a sharp slowdown in the German economy, President Nicolas Sarkozy of France and Angela Merkel, the German Chancellor, pledged to back the common currency. “Germany and France feel absolutely determined to strengthen the euro as our common currency and further develop it”, Ms Merkel said.
In the most concrete of their proposals, the French and German finance ministries will draw up plans early next year to introduce a common corporate tax base and rate for the two countries to take effect from 2013. Mr Sarkozy said France and Germany would also come up with a joint proposal for a financial transaction tax next month, although he did not say if and when they would adopt it. The French and German leaders poured cold water on the idea of common eurozone bond issuance as a definitive solution to the debt crisis. “One day, perhaps”, Mr Sarkozy said. “But at the end of a process of European integration, not at the beginning.”
Mr Sarkozy and Ms Merkel also proposed to formalise twice-yearly summits of the 17 eurozone leaders to be chaired by Herman van Rompuy, the EU’s permanent president. The French president said the measure amounted to the creation of an “economic government for the eurozone”.
Full article (FT subscription required)
© Financial Times
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article