The French government is withdrawing a plan to offer a tax amnesty to attract back home money deposited or invested outside the country but denied Saturday that it had abandoned the scheme.
The idea was first put forward in May by Prime Minister Jean-Pierre Raffarin who had been inspired by similar initiatives in other European countries but the plan drew criticism from opposition politicians and even some of his own supporters. "After study" of a proposal for the "relocation of expatriated capital," Raffarin said this weekend, "it has become clear that this action needs to be taken at the European level in a coherent manner.
"That is why this measure will not be in the 2005 budget proposals."
Raffarin's office confirmed Saturday the postponement but said that should not be taken as definitive.
"This project" which would have implications for the whole of Europe as a home for investment "should be studied in the autumn by the (European) Commission."
But observers point out that with a European Union that now has 25 members any negotiations will take a long time and a decision cannot be expected for many years, if at all.
Belgium, Germany and Italy have all tried to lure back funds placed overseas and all three countries have had only limited success.
When he first floated the idea Raffarin refused to use the phrase "tax amnesty" on money illegally stashed abroad, preferring to speak of a concessionary tax of 10 to 20 percent on the amount.
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