Final Word from Tuesday, May 4, 2004

France and Germany are willing to play hardball to get what they want in the EU. According to the Financial Times, Jacques Chirac said last week that EU states should be given two years to ratify the constitution or to leave the EU altogether. He said that he's not against putting friendly pressure on those who refuse the constitution and block everyone else. Germany, for its part, is pressing new EU states to raise their corporate tax. There are reports out of Germany that the CR's investment incentives, and esp. the tax breaks for new investors, will soon come under direct attack. Czech government officials state confidently that there's no mechanism for requiring EU states to raise their corporate taxes, but it remains to be seen how well the CR and other small countries will be able to withstand the mounting pressure from their bigger and richer EU partners. European Union


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