French President Nicolas Sarkozy and German Chancellor Angel Merkel agreed here on Monday that Value Added Tax (VAT) cuts is not an option for France and Germany as an effective response to the global economic crisis.
This agreement was made at the Elysee Palace, where the two leaders of the twin engines of Europe met along with top ministers from their governments to discuss concrete proposals on their countries' economic troubles.
"Lowering the VAT may be the right answer for other countries, such as Britain," Sarkozy said after British Prime Minister Gordon Brown's announcement of cutting tax to help economies.
"When we lower the VAT, what does that bring? Only lower prices." he said. "Measures, such as emphasizing innovation and research, would be more effective for our economies."
"We are both agreed." Merkel said. "A lower VAT is not the right solution for France and Germany."
Facing the worsening global economy recession, Germany prefers a national aid while France wants a Europe-wide program. Sarkozy was expected to persuade Merkel to join the Europe rescue plan.
"We acted together on the crisis. We made the same analysis." The French president said there were much more agreements than disagreements. He noted measures agreed between the two countries for relaunching their countries should be appropriate to each country but coordinated with its EU partners.
He also said positions of Germany and France on the EU climate and energy package were getting closer.
The European Commission is planning to propose a 130 billion euros (about 166.05 billion U.S. dollars) economic aid program on Wednesday to help the EU overcome the current crisis.
Source:Xinhua
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