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Germany must raise tax take for EU goal


BRUSSELS, Nov 8 (Reuters): Germany's planned grand coalition government must raise the country's tax take if it wants to comply with European Union limits on budget deficits, acting Finance Minister Hans Eichel said yesterday.
Speaking as he arrived for probably his last EU finance ministers' meeting, Eichel said, without elaborating, that it would be "fatal" if the country could not again respect the limits, laid down in the EU's Stability and Growth Pact.
Germany's deficit is expected to exceed the EU's 3 per cent of gross domestic product (GDP) limit for a fourth consecutive year in 2005 and break it again in 2006.
Eichel was speaking after reports the planned coalition had agreed to hike the country's sales or value added tax rate to 19 per cent from 16 per cent. He declined to comment, noting he was not involved directly in the negotiations.
Germany's designated chancellor Angela Merkel has said the next government's aim will be to respect the EU budget rules again by 2007. Coalition officials have said this means the incoming government must find at least 35 billion euros in new revenues or savings.