Hello there, welcome to Haaba! As you browse through the site, please feel free to send us your feedback (or bug reports). We'll be glad to hear from you.
France's Prime Minister Francois Fillon on Friday urged EU partners to debate a French proposal to cap value added tax (VAT) on oil to help ease soaring fuel prices.
'This question will be discussed in the framework of the European Council (summit 19-20 June,') Fillon said in Tallinn, Estonia, where he is currently on a tour of EU capitals before France takes over as EU president for a six-month term on July 1.
'It must be that Europe accepts the idea that proposals must first be discussed before getting a negative response,' he said.
Facing blockades of French ports by striking fishermen, French President Nicolas Sarkozy suggested on Tuesday that VAT on fuel could be suspended when prices go too high and said he would seek EU backing for the plan.
Under EU rules, however, member states cannot apply a VAT rate of less than 15 percent unless they are able to obtain an exemption for a specific product or service, which requires unanimous backing from all other countries.
Despite the growing public outcry against record energy prices, Sarkozy's idea has received a mostly cool reception from many of Paris' EU partners.
Chairman of the Eurogroup of finance ministers Jean-Claude Juncker agreed Friday on the need for a debate but noted also the agreed limits on cutting VAT.
'To think about a political reaction to the rise in and volatility of oil products is not a preposterous idea but is one well worth thinking about,' said Juncker, whose is also Luxembourg's prime minister and finance minister.
After Tallinn, France's Fillon was due in the Finnish capital Helsinki later Friday to present the priorities for France's EU presidency.