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Political unity is next step, say Germans

Daily Telegraph Saturday 2 January 1999

GERMANY opened its six-month presidency of the European Union yesterday with pledges to push for political union in Europe, co-ordination of national tax policies and an overhaul of finances to prepare for enlargement.

Bonn's priorities for its term in the EU chair will include an assault on Britain's £2 billion annual rebate from the Brussels budget, which Germany sees as out of date and unduly generous.

The German programme spells danger on all fronts for Tony Blair as he tries to persuade the British people that closer engagement in Europe - with preparation for entering the single currency - is in the national interest.

The day after EU finance ministers locked the exchange rates of 11 national currencies and formed the euro, Gunther Verheugen, Germany's Foreign Minister, left no doubt that political union was his country's - and Europe's - next target.

Speaking on BBC Radio as the presidency opened he said: "Normally, a single currency is the final step in a process of political integration.This time the single currency isn't the final step but the beginning. The political conditions for a successful and stable euro have still to be guaranteed."

The Foreign Minister's remarks echoed precisely those of several other EU leaders including Jacques Santer, the president of the European Commission's, who on Thursday vowed to work for ever-closer political union in order to ensure the euro's success. It is now clear that Germany and France will lead a push to co-ordinate economic, employment and tax policies, hoping to ensure a common approach across the community.

In a further blow to British hopes of calming the storm over Germany's intentions on tax, Mr Verheugen also floated the idea of setting upper and lower limits for VAT and corporation tax across the Union as a means of ending "unfair tax competition" between nations.

Andrew Gimson in Berlin writes: A senior German politician has called for the formation of a European Union army, replacing the national armies of the member states.

Hans Eichel, a leading member of Chancellor Schröder's Social Democrats, says in an interview published today in the Rheinische Post: "Why do the 15 EU states still need 15 foreign ministers and 15 diplomatic services? Europe would be incomparably stronger if it spoke to the outside world with a single voice. Why do we still need purely national armies? One European army is enough."

Mr Eichel is the president of the Bundesrat, the second chamber of the German Parliament,and the prime minister of the province of Hesse.

His remarks will enrage British euro-sceptics, who will see them as confirmation of their worst fears about the desire of German politicians to undermine and destroy Europe's nation states.

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