Germany at odds with France on fuel tax

Germany at odds with France on fuel tax
Photo: DPA
French President Nicolas Sarkozy openly acknowledged on Friday that France and Germany disagreed on tax breaks to ease the pain of high oil prices, in a blow to his plans to cut value added tax on fuel.

“I respect the position of our German friends, who consider that there’s a market and that it’s got to be left to the market. That’s not my position,” Sarkozy told journalists on the sidelines of an EU summit in Brussels.

“I won’t give up, I’m going to fight on this subject, it’s a question of justice,” he added.

Facing growing protests for action against high oil prices, Sarkozy proposed recently to ease EU value added tax limits on fuel when prices go over a threshold.

However, Sarkozy’s plan, which would require unanimous backing from member states to go ahead, has found little backing among Paris’ EU partners.

“Taxing 20 percent when the barrel of oil is at $42 and taxing the same 20 percent at $139 is not the same thing,” Sarkozy argued.

EU leaders struggled at the two-day to overcome divisions over how best to tackle soaring oil prices in the face of recent waves of protests over the cost of fuel.

Following Irish voters’ rejection of the European Union’s Lisbon Treaty last week, EU leaders had been eager to demonstrate that the bloc can rise to tough challenges like finding a solution to the impact of high oil prices.