Thursday, 8 April 2004

Swedish PM attacks tax policies in new EU member states

Swedish prime minister Göran Persson has criticised tax policies in new EU member states, creating a political storm.

In media interviews and most recently on a visit to Berlin Tuesday (30 March), Mr Persson argued that Sweden is not prepared to pay for new member states via EU contributions, when the people earning most in these countries are not taxed or taxed at a very low rate.

“If they [the new member states] believe that we will tax heavily in Sweden, Finland and Denmark and send the money to Eastern Europe, where the upper-class does not pay taxes, this is not sustainable”.

Mentioning Poland and Estonia as possible examples of such countries, Mr Persson concluded, “they must also tax their best earners” in an interview with Hufvudstadsbladet.

The Swedish Conservative top-candidate in the European Parliament elections, Gunnar Hökmark, questions whether Mr Persson is in fact arguing in favour of a common European tax regime.

“If that is the case, I will fight it hard and determinedly”, Mr Hökmark said according to Swedish Radio.

“Frankly I believe he is attempting to catch up with those forces in the Social Democrat party opposed to foreigners”, said the leader of the Centre Party Maud Olofsson.

In December Sweden and five other EU countries sent a letter to the European Commission saying that the EU’s budget ceiling should be capped at 1 percent of gross national income (GNI).

By Lisbeth Kirk

This article first appeared on EUobserver.