Germany and France made the first step today towards the coordination of their tax policies today, as German Finance Minister Wolfgang Schäuble took part in the French Cabinet meeting and made a joint statement with French Finance Minister Christine Lagarde.”The convergence between our fiscal systems is a essential element in our economic integration and the deepening of the European interior market,” said French President Nicolas Sarkozy, according to the French newspaper Les Echos.
The next step will be the analysis of both fiscal systems, as the tax distribution differs between the countries, as well as the amount. In France, obligatory deductions represent 42.8% of the GDP, while they represent 39.5% of the GDP in Germany.
Schäuble was the first foreign government member to participate in a French Cabinet meeting. This comes after the French Finance Minister Christine Lagarde was invited to the German Council of Ministers in March 2010.
In their joint statement today, Schäuble and Lagarde also announced that they signed a letter with proposals to reinforce the European Union’s budget discipline rules. Among other things, they asked for more political sanctions in case of gross non-compliance of the European deficit limit by member states.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.