Trouble in Euroland

European Union Newcomers Anger France, Germany With Tax Cuts

The European Union's newest members are using corporate tax cuts to win a bigger share of investment in Europe, and putting pressure on French President Jacques Chirac and German Chancellor Gerhard Schroeder to consider tax reductions to spur growth and increase employment.

Companies including Volkswagen AG, Europe's biggest carmaker, France's PSA Peugeot Citroen and Siemens AG, Germany's biggest engineering company, are building factories and hiring workers in the eight Eastern European countries that joined the EU on May 1. The median tax rate in those nations is 19 percent, half that of Germany and compared with 34 percent in France.

Lower taxes! Wotta concept - no wonder the Euroburos are cranky!