Europe Ministers to Focus on Alcohol Tax
Tuesday, November 28, 2006; 12:59 AM
BRUSSELS, Belgium -- European finance ministers are meeting Tuesday, with talks focusing on the thorny issue of alcohol taxes.
The 25 EU ministers will pick up a battle over higher alcohol taxes and deal with Britain's attempt to curb a value added tax fraud that costs it hundreds of millions of pounds every year.
Each EU nation sets its own taxes, agreeing only on some basic standards that they can only change if all are in favor.
On Monday, finance ministers from the 12 nations that use the euro said they saw no need to act right now on the strength of their currency against the dollar.
Fueled by Europe's recent pickup, the euro hit a four-year high of $1.30 last week, cheering trans-Atlantic Christmas shoppers and oil traders _ cushioned against higher oil prices _ but worrying EU exporters as they saw their U.S. earnings lose value.
"Our present exchange rate has no particular effect requiring our reaction," said Luxembourg Prime Minister Jean-Claude Juncker who led the monthly talks between euro nations.
The United States and Europe are each other's largest trading partners.
"Excessive volatility and disorderly movements in exchange rates are undesirable for economic growth," Juncker told reporters.
Earlier French Finance Minister Thierry Breton said he would urge "collective vigilance" among his colleagues, some of whom said it was too early to worry.
EU Economic and Monetary Affairs Commissioner Joaquin Almunia was upbeat about the euro-zone economy saying he stuck to forecasts that the region would grow around 2.6 percent this year and above 2 percent next year.
If these forecasts are confirmed and countries cut public debt, he said the EU executive would be able to end sanctions against Germany for running a budget deficit above the EU 3 percent limit. He did not say when. A clean slate for Greece was "possibly also" in his sights, he said.
He plans to recommend an all-clear for France on Wednesday, but Italy and Portugal would need to take more action before they got there, he said.