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Report: Sarkozy criticizes Merkel's tax plans

Business Materials 10 June 2010 13:56
French President Nicolas Sarkozy has criticised German Chancellor Angela Merkel's plans to levy new taxes, saying that austerity programs inevitably lead to recession, the daily Le Figaro reported Thursday.
Report: Sarkozy criticizes Merkel's tax plans

French President Nicolas Sarkozy has criticised German Chancellor Angela Merkel's plans to levy new taxes, saying that austerity programs inevitably lead to recession, the daily Le Figaro reported Thursday.

Sarkozy made the comments during Wednesday's cabinet meeting, telling ministers that Merkel's plans to tax people departing from German airports was probably unfeasible, DPA reported.

He also expressed doubts that a tax on financial transactions would raise 6 billion euros (7.2 billion dollars).

Both proposals are part of an ambitious program of new taxes and spending cuts put forward by Merkel to save the German government 80 billion euros in expenses over four years.

Also faced with the need to reduce his government's budget deficit, Sarkozy has steadfastly refused to levy new taxes, saying that they would hurt the French economy.

"One austerity program after the other leads to recession," he was quoted as saying.

Sarkozy also told his ministers that the sudden cancellation of a meeting with Merkel on Monday, reportedly because of her heavy schedule, had suited him, since he had not been briefed by the French embassy in Berlin about her new austerity program.

There had been broad speculation in French and German media that the last-minute cancellation was due to disagreement between the two leaders. The meeting is now scheduled for June 14.

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