Final Word from Tuesday, April 20, 2004

The CR has benefited greatly from offshoring, the practice of moving production to low-cost markets, but political pressure against it is mounting in the U.S. and Germany. In Germany, Chancellor Gerhard Schröder and Bavarian PM Edmund Stoiber warned the 10 new EU members on Sun. against tax dumping. They said the countries can't on the one hand forego revenue by maintaining low taxes, and on the other hand count on EU subsidies to build their infrastructure. As the EU's largest net contributor, Schröder said, Germany can't be made to finance unfair tax practices against itself. Stoiber added that Germany can't accept the transfer of jobs abroad when the jobs are financed to a great extent by German taxes. Such comments are bad news for the CR. A political backlash in Germany against offshoring could have a direct impact on future Czech economic growth. Shcroeder Prime Minister


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