German cabinet approves tax cuts

Published: 30 June 2003 y., Monday
German cabinet has approved sweeping income tax cuts to try to kickstart Europe's largest economy, but without busting European Union budget rules. Schroeder said the tax cuts would be financed by subsidy cuts, new borrowing and possibly revenues from the sale of shares in ex-state monopolies, but he gave no precise figures. Schroeder said the 2004 budget should still be able to meet European Union rules, which require that the deficit be below three percent of gross domestic product. Germany broke that limit in 2002 and is expected to do so again this year. The decision to bring forward by one year 18 billion euros of tax cuts scheduled for 2005 was taken at a rare weekend cabinet conclave at a secluded country hotel. Both the European Commission and European Central Bank have warned against financing the tax cuts through more state debt.
Šaltinis: europedaily.com
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