European Commission Offers Budget Advice To Six Member States

by Ulrika Lomas, Tax-News.com, Brussels

17 January 2002

The European Commission on Tuesday broadly approved the medium-term budget plans of six member states, but offered some warnings on tax and government spending.

The countries which underwent assessment earlier this week were: Belgium, Sweden, Austria, Luxembourg, Finland, and the Netherlands. The remaining nine countries, which include Germany, France, and Italy, will come under the spotlight on January 30th, according to reports.

Stressing the need for sound public finances, European Economic and Monetary Affairs Commissioner, Pedro Solbes, warned that Austria's growth rate was likely to surpass the estimated growth rate trend, and recommended that it reduce its tax burden. Finland's economic growth forecast was marred by 'unusually high uncertainties', he went on, but the FIM 2 billion tax cut planned for the 2002-03 fiscal year is a welcome development.

Luxembourg, which usually presents very few concerns in matters of this nature, was urged to rein in its rising government spending rates.

'Last year's world-wide economic slowdown has demonstrated the importance of a consistent and well coordinated response to external shocks,' Mr Solbes concluded.

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