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German lower house passes tax reform package

The lower house of parliament, the bundestag, recently passed German Chancellor Gerhard Schroedr's tax reform package for 21.2 billion dollars (23.7 billion euros) in tax cuts for individuals and businesses. The approval, on a 324-298 vote, was expected because Schroeders centre-left government has a majority in the Bundestag.

But the Social Democrat-Greens government needs backing from the opposition Christian democratic Union/Christian Social Union (CDU/CSU) to pass the final hurdle of the upper house, the Bundesrat, which hears the bill on June 9.

CDU/CSU leaders, who seek larger tax cuts, have said however that they will not block the legislation. The 45 billion mark tax reform package calls for a reduction in the minimum income tax rate to 15 percent by 2005 from 22.9 percent at present. Similarly, the top income tax rate will be cut to 45 percent from 51 percent.

Publicly owned firms are to see their tax on profits cut as of 2001 to 25 percent, from 40 percent. The CDU wants to see the top income tax rate cut to 35 percent.

Finance Minister Hans Eichel pleaded in parliament with the conservative opposition not to block the tax cuts which he said were needed to make Germany competitive internationally.

Ex-IMF chief calls for solidarity

Former International Monetary Fund Director Michel Comdessus appealed recently for globalisation to be accompanied by solidarity between the world's richer and poorer countries.

"National economic policy must not be marked by egoism,", he told a Vatican-organised symposium on ethics and finance.

"Globalisation must recover a dimension of solidarity", Camdessus said. "Each country is responsible not only for its own economic equilibrium but that of the entire world".

Some 250 bankers, financiers and economists attended the seminar dealing with such topics as speculation, easy money and the risks of the new economy.

The meeting was organised by "Centesimus annus", a foundation set up by the Vatican in 1993 to spread the social doctrine of the Catholic church in the world of finance, and obtain funds for developing countries.

US for WTO trade action

The United States said it was pursuing actions at the World Trade Organization against six countries it says are in violation of international trading regulations.

In reports to Congress, the office of the U.S. Trade Representative also warned that Washington might take unspecified action against member of the European Union that provide subsidies to the Airbus Industries aircraft manufacturing consortium.

US Trade Representative Charlene Barshefsky said in a statement that "in general our trading partners have made good progress in the implementation of existing commitments."

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