EU Economics

EU TAX WAR: Merkel’s finance chief warns Theresa May NOT to compete with EU over Brexit

BRITAIN must not reduce corporate taxes to gain a competitive advantage over the European Union (EU) as the UK gears up to leave the bloc, German finance minister Wolfgang Schaeuble has warned.

After making the thinly-veiled threat, Angela Merkel’s finance head then urged Theresa May not to use fighting talk towards the EU.It comes after the Prime Minister said punishing the UK would be a “calamitous act of self-harm” for the union.Mr Schaeuble told an audience at the World Economic Forum in Davos that Germany is convinced Brexit is not in the interest of Britain or the EU.But the minister insisted he is not looking to punish the UK for splitting from the bloc, although there would be “consequences”.

He added that Germany’s position is to now to limit the damage of the divorce.

wolfgang schaeubleGETTY•EPA

Wolfgang Schaeuble warned Britain not to cute taxes

Theresa May GETTY

Theresa May warned the EU against punishing Britain

The minister told an audience: “The UK has always agreed in the G20 summit in that we will not use the taxation of companies as a matter of instrument for competition, that has been agreed, and if we want to be taken serious, we have to stick to what we agreed.”I got Prime Minister May saying UK will be a truly global economy.. a truly global economy has to stick to what has been agreed globally, otherwise there will be a contradiction”He then prompted laughter by adding: “And you can always count on UK – UK government is always very consequent and very strict, therefore I have no problem.”Shortly after last year’s Brexit vote, Swedish Prime Minister Stefan Loefven also said that if Britain were to cut corporate tax, relations with Brussels would be damaged.

After firing the warning shots at Britain, Mr Schaeuble later added: “We will see what will happen in the negotiations, but I think we should not start negotiations by threatening each other.”

He also told the Davos audience: “I don’t think we want to punish UK…. We have not been happy on this [Brexit] decision, we are convinced it is not in the interest of UK, neither in the interest of Europe.

“Therefore, our position is to limit, to minimise, the damage for the UK, as well as for Europe.”

Mr Schaeuble added: “Europe is complex and therefore the negotiations will be funny.. but we will do the best to make the relations between UK economy and Europe economy as close as possible.”But of course, some consequences are given.”It comes after Mrs May outlined her Brexit vision in a much-anticipated speech this week.The Prime Minister said she hoped to “seek to avoid a disruptive cliff edge” for businesses and would look for a free trade deal with the EU that would give British companies “maximum freedom to trade with and trade within European markets”.

But the leader also warned against the EU punishing the UK, which she said would be a “calamitous act of self-harm”.


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Peter. As Jonesy from ‘Dads Army’ would say: ‘They don’t like it up ’em’. Indeed so! The arrogance of Schauble and other EU politicians is breathtaking. It demonstrates how far removed they are from the norms of democratic political exchange. Like cornered animals that is when they are most dangerous. However it is too late for threats post Brexit and TM’s speech. All will applaud her statement about walking away if a “bad deal” is offered, and we lose nothing by doing just that. In any event the EU establishment could do precisely nothing if at some point the British… Read more »


Now they know we will not remain in the single market which I think they were banking on … Litrally. Now the screaming and gnashing of teeth begins, as they try desperately to think of ways of screwing money out of the UK before we finally leave.

How is this for a solution. Tell them to take those fees out of our assets of over 40 years, before they return the remainder of our financial assets to Britain before we leave.

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