French President Nicolas Sarkozy and German Chancellor Angela Merkel met in Paris to push for a rapid and co-ordinated European economic stimulus plan, but rejected VAT cuts to spur spending.
French President Nicolas Sarkozy met Chancellor Angela Merkel of Germany, the world's third-biggest economy, in Paris Monday to try to persuade her to support a Europe-wide economic rescue programme.
The meeting, which included ministers from both countries, was one of the regular mini-summits between French and German leaders, but Sarkozy was set to use it to try to overcome Merkel's reluctance to back a continent-wide plan.
Reports say that the European Commission is planning to announce a 130-billion-euro (163-billion-dollar) economic stimulus programme this week to help the EU overcome the global financial crisis.
A German government spokesman stressed last week that Berlin had just committed 32 billion euros over the next two years to its own economic jumpstart plan and expected that to figure in Brussels' calculations.
France and Germany will not follow Britain's lead by slashing value-added tax (VAT) to stimulate spending as a way to fight the economic slowdown, Merkel said after the meeting with Sarkozy.
"A general cut in VAT is the response chosen by some countries but is not the right answer for France and Germany," Merkel said.
"We will be holding more discussions on how to provide targeted aid" to the economy, she added.
Date created : 2008-11-24