Minister Urges New EU Members to Raise Taxes

A day before ten countries join the European Union, German Economics Minister Wolfgang Clement has threatened new members that EU aid to them will be slashed, if they don't raise their low tax rates. In an interview with business daily Financial Times Deutschland Clement said, "When it's said in central and eastern Europe that there should be no uniform taxation, then a country like Germany -- which, by the way, contributes significantly to the development of these nations -- will ask whether EU infrastructure funds should be channeled to (the new EU members) in the same massive proportion in future." Clement added that Germany cannot finance low tax rate systems outside its borders. Clement has been supported by German Chancellor Schröder and Finance Minister Hans Eichel in his criticism of several new EU members for luring away German businesses by lowering taxes in particular for companies and investors.