FRANCE:FRANCE'S PRESIDENT Nicolas Sarkozy urged fellow EU leaders last night to cut VAT rates on fuel.
Mr Sarkozy, whose country assumes the presidency of the EU on July 1st, linked Europe’s failure to tackle spiralling oil and food prices to voter alienation from Europe and the Irish rejection of the Lisbon Treaty. He insisted that, as the Austrian chancellor Afred Gusenbauer put it yesterday: “The most important issue here is that Europe is tackling the real problems of real people.”
The French proposals, which would see VAT rates fall progressively as prices rise, were opposed by the commission, Britain, Germany and several Nordic countries which said there were better ways to deal with the problem. Italy is proposing a tax on oil company windfall profits.
French minister for Europe, Jean Pierre Jouyet last night was confident, however, that the leaders will today ask the commission to explore all options for the October EU summit.
The French have been pressing the Irish Government to bring to the October EU summit a road map out of the treaty stalemate.
Publicly supportive of Taoiseach Brian Cowen’s call for time for reflection and consultation, Mr Sarkozy is understood, however, to have been privately insisting the crisis is not a European one but an Irish problem. French satirical magazine Le Canard Enchainè quotes aides attributing to him an exasperated outburst about the Irish: “They are bloody fools. They have been stuffing their faces at European expense for years and now they dump us in the s**t.”
But observers suggest the French may be willing to accommodate Ireland by revisiting the composition of the commission and the restoration of the principle of one commissioner per country. Although the proposal is widely seen as weakening the commission, particularly with further enlargement in the Balkans on the cards, the French have traditionally preferred a weak commission.
In an interview with French newspaper Liberation, Luxembourg’s prime minister, Jean Claude Juncker, spoke of the inevitability of the development of a multi-speed Europe if it becomes clear the treaty cannot be substantially ratified. It would be the only way to avoid gridlock, he argues. Those countries willing to pursue greater integration would press ahead, while others stayed behind.
“It’s not the Europe I have dreamed of, but if the desire to live together has different meanings, this may be necessary”.
Meanwhile, French finance minister Christine Lagarde has further indicated that her country will not now press ahead with tax harmonisation plans for Europe.
Speaking in London, where she met British counterpart Alistair Darling, Ms Lagarde said there were “difficult” times ahead. Asked if France had dropped plans to push forward tax harmonisation under its presidency, she said there were “other priorities”.