EU Hits Out At Bush Tax Cut Plans

by Ulrika Lomas, Tax-News.com, Brussels

25 February 2003

According to reports in the international media, speaking at this weekend's G7 meeting, European Central Bank (ECB) President, Wim Duisenberg, supported by several eurozone finance ministers, expressed deep scepticism with regard to the US President's tax cutting plans, arguing that the $695 billion programme will endanger both the European and global economies.

Speaking on Saturday, Mr Duisenberg made reference to America's twin budget and current account deficits as a 'cause of concern for the EU and the world'. Greek Finance Minister, Nikos Christodoulakis, meanwhile, speaking on behalf of eurozone countries within the global body, revealed that there is scepticism within Europe at the 'size, the composition and the timing' of President Bush's tax cutting package, which centres around the abolition of dividend taxation.

However, the EU Observer news service revealed that the G7 meeting was divided on the issue, with France assuming a more conciliatory position than other European G7 members, and the United Kingdom rushing to the defence of the US. John Manley, Canada's Finance Minister also reportedly defended the United States, arguing that deficits are normal during periods of weak growth.

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