LONDON - Chris Patten, the outgoing EU foreign affairs commissioner, sharply criticized French Finance Minister Nicolas Sarkozy for his recent suggestions that new member states be punished for having low corporate taxes.
"Should we regard poverty as a form of comparative advantage, for which the poor should be penalized?" Patten wrote in The Financial Times. "Personally, I am glad that the estimated annual gross domestic product growth rate of Estonia in 2004 is more than 5 percent, and that Lithuania is going on for 7 percent. Would we prefer the entire EU to grow at the current French or German rate of less than 2 percent?"
"Are we now to tell them to give up Adam Smith and embrace big government corporatism?" he asked rhetorically.
Patten said it was bizarre that anyone should see growing prosperity in one part of our single market as a threat rather than an opportunity for us all. "We might all do well to consider what we have to learn from our new partners, rather than teach them old, failed lessons. Our attitude should never be that they have missed a good opportunity to shut up," Patten said.
"So if there is a worry about differential tax rates, the right response is for the richer countries to reduce their own taxes. If enlargement exposes the older member states to real competitive challenges within the EU from the newer ones, so much the better," he said, adding that after years of accession negotiations, old members should be aware of the tax systems that new members have created.