Premier Estland valt Frankrijk aan vanwege standpunt vennootschapsbelasting (en)

EUOBSERVER/ WARSAW - The Estonian Prime Minister Juhan Parts on Wednesday (29 September) sharply attacked France for its ongoing pressure on new EU member states to increase their corporate tax rates.

Speaking before the College of Europe in Warsaw, Mr Parts rebuked the French finance minister Nicolas Sarkozy, who said earlier this month that new EU countries with low tax rates such as Estonia should lose their EU regional funding.

Mr Parts characterised the French finance minister's comments as "not according to European values" and "really bad".

He went on to say that the debate on harmonisation of tax levels at an EU-wide minimum level was "demagogic".

The Estonian PM directly challenged fears that companies may shift their investments from the 'old' to the new member states - which generally charge companies much less in a bid to attract investment.

"Companies are always looking for the best opportunities. I would say that it is better that they stay in the EU than move to Asia", he stated.

The Estonian premier added that it was wrong to believe that new member states are too poor to afford low tax rates.

"Business- friendly tax rates produce more growth and thus more revenues for the public sector", Mr Parts said.

According to him, harmonisation of tax levels in the EU, as proposed by Paris and Berlin, would even undermine national democracy.

"If national governments cannot even decide over taxes anymore, citizens will start to question what is the point of going to vote in elections."

Dedicated liberal reformer

During the discussion in Warsaw with students and diplomats, the energetic 39-year old Estonian leader presented himself as a dedicated liberal economic reformer.

He stressed that the success of the so-called "Lisbon agenda" - the EU's goal to become the most competitive economy by 2010 - would depend on member states' ability to make "many painful decisions".

The deregulation of labour markets should be a key priority, he said.

Mr Parts stated that Europe needs "more competition" and less state intervention.

"For example, replacing national champions with European ones supported with comforting public funds will not help - you cannot create competitiveness at the expense of competition."

EU money from agriculture to research

Warming up for the difficult EU budget talks in the months ahead, the Estonian leader proposed that the EU shift its money from agriculture to "Lisbon" policies.

"Is it really according to the Lisbon strategy to spend 47% of the EU budget on agriculture?", he asked.

According to Mr Parts, the EU should instead investing in research, by means of a "common scientific area".

The provocative Estonian stance on the EU budget is likely to further antagonise France, the largest beneficiary of the EU's common agricultural policy.