Cracks Start To Appear In EU Finance Pact

The Czech Republic and Hungary have said they will not sign the new European Union pact unless tax harmonisation plans are dropped.

The announcement comes less than one week after the EU summit hailed as bringing unity to all but one of its member nations.

In Brussels, 26 of the 27 members of the EU backed new fiscal rules to keep budgets in line, with only the UK abstaining.

Neither Hungary nor the Czech Republic uses the euro, and tax harmonisation plans were not explicitly discussed as part of the changes at the summit.

Nonetheless Hungarian prime minister Viktor Orban and his Czech counterpart Petr Necas said they wanted to take active roles in negotiations, adding they are concerned the pact may take away their independence on tax policy.

Mr Necas said: "We support the solutions which result in the stabilisation of the eurozone.


"But we are convinced that tax harmonisation would not mean anything good for
us."

Stock markets dipped following the news, but the major European indices remained in positive territory.


http://news.sky.com/home/business/article/16130705