Several EU nations clamoured for relief from record oil prices on Wednesday, but a suggestion from French President Nicolas Sarkozy to ease sales tax on fuel found little support. With crude oil prices close to all-time highs, fishermen and truckers have led waves of protests against record fuel prices, raising pressure on EU governments to react urgently.
Following a request from Portugal for an urgent debate, Slovenian Prime Minister Janez Jansa said that he would put soaring oil and food prices on the agenda of an EU summit on June 19-20. In Italy, new Economy Minister Giulio Tremonti said that he would hold a "round table" with consumers and producers in the coming days about soaring prices and what can be done.
French Economy Minister Christine Lagarde called on the Group of Seven richest countries to put pressure on oil producing countries to hike their output. Facing blockades of French ports by striking fishermen, Sarkozy suggested on Tuesday that value added tax on fuel could be suspended when prices go too high and said he would seek EU backing for the plan.
Despite the growing public outcry against record energy prices, Sarkozy's idea got a cool reception from many of Paris' EU partners. Austrian Finance Minister Wilhelm Molterer sounded opposition to the proposal on Wednesday, arguing "What will you do when prices fall again, reintroduce the tax? I'd like to hear the political discussions then."
"And then someone will have to say how we'd finance the shortfall in tax revenues," he added. Spanish Economy Minister Pedro Solbes voiced doubts about the proposal, which he described as "a measure that will have to be explained to me to convince me that it's good."
On Tuesday, Belgian Finance Minister Didier Reynders also expressed reservations about Sarkozy's plan, which he said would have "colossal costs." "We're ready to take a look at the question but a reduced (VAT) rate would have colossal costs of about four billion euros in Belgium," he told the Belgian news agency Belga, stressing that it also "might not change the final price."
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