| Author (Person) | Spinant, Dana |
|---|---|
| Series Title | European Voice |
| Series Details | Vol.11, No.3, 27.1.05 |
| Publication Date | 27/01/2005 |
| Content Type | News |
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By Dana Spinant Date: 27/01/05 The leaders of France and Germany should understand that candidate countries cannot catch up with the EU's richer states unless they build a viable business environment with a competitive tax regime, the prime minister of Romania says. On a visit to Brussels this week, Calin Popescu Tariceanu defended his government's decision to introduce a 16% rate of corporate and income tax from 1 January. Romania is the latest of a series of new member states and candidate countries to slash its corporate taxes to attract foreign investors. 'Old' EU states, in particular France and Germany, have strongly criticised new member states which cut their taxes, accusing them of unfair competition and of fiscal dumping. Remarks by Germany's Gerhard Schröder last May were taken as a threat to reduce subsidies from the EU budget for the new states, if they persisted with low tax rates. Tariceanu, who took over as prime minister in December, said: "It is to be expected that France and Germany will not be very happy with what we've done [the introduction of a 16% tax], but let's be realistic and respect the difference of scale between Romania and the other countries. Romania is too weak to be considered as a competitor." The Liberal prime minister said: "The leaders of France and Germany should understand that we can't expect the candidate countries to catch up unless they take such decisions. These countries need a favourable economic climate to grow and to become more competitive. Even the countries that joined the EU in the 1970s and 1980s still have some catching up to do." The Romanian government hopes to attract foreign investors by offering an appealing fiscal environment (the average corporate tax in the neighbouring countries is 17%) and to shrink the black economy by reducing the incentives for tax evasion. Tariceanu said that the tax reform was one of the elements that he hoped would help Romania achieve constant and sustainable economic growth. "If the Romanian economy grows by 5% every year, we will double the gross domestic product in eight years," he said. The prime minister admitted that his government faced "hard work" to get Romania ready for accession to the EU on 1 January 2007, as planned. He identified "the weak capacity of the public administration to assimilate the acquis communautaire" as one of the biggest challenges ahead. Reforming the country's vast agricultural sector was another huge task. "We need solutions to make the professional re-training of those involved in the agricultural sector." Another priority for the new coalition government, which includes, in addition to the Liberal Alliance, the ethnic Hungarians' Party and a small centrist group, is to "rebuild the independence of justice". He said that his government had signalled its serious intent. "The first such gesture was the designation of an independent justice minister [Monica Macovei]. The secretaries of state will also be independent, not chosen on the basis of the current political majority in parliament, to give a clear signal that we want an independent justice," he said. On combating corruption, which was identified by the EU institutions as Romania's biggest problem, Tariceanu said that while "small corruption" had been brought to light, so far "the big corruption, which threatens the national security, [had] yet to be unveiled". He insisted that fighting corruption was an important part of his programme, in order to "put the economy on a sound basis, to ensure fair competition among all the participants". On a visit to Brussels on 24-25 January 2005, the new-elected Romanian Prime Minister, Calin Popescu Tariceanu, defended his government's decision to introduce a 16% rate of corporate and income tax from 1 January 2005. Romania was the latest of a series of new member states and candidate countries to slash its corporate taxes to attract foreign investors. |
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| Source Link | Link to Main Source http://www.european-voice.com/ |
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| Countries / Regions | Romania |
