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Euro will bring taxes into line, say French

John Lichfield
Saturday 12 January 2002 20:00 EST
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Membership of the euro would erode tax differences between the UK and other EU countries – possibly bringing some rise in British taxes and reducing those on the Continent – the French finance minister, Laurent Fabius, says in an interview with The Independent on Sunday today.

Although Mr Fabius did not directly say euro membership would lead British taxes to rise, this is clearly implied in what he says. However, he suggests that any tax increases agreed by British governments would also allow Britain to re-invest in its public services.

"The arrival of the euro as something tangible, something real in everyone's wallet will inevitably reduce the gaps between prices in countries in the euro zone but there will also be a tendency to reduce the gaps between the factors which influence prices, including taxes," he said.

"That does not mean taxes will be decided at European level. All national parliaments, all national governments will want the final say on tax. But as the euro makes national prices converge, then tax rates will also naturally come closer together. We should not try to hide this fact."

Bill Morris, leader of the Transport Workers' union is to call for a euro referendum to be delayed. It is believed that his remarks have the backing of the Treasury.

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