We would like to wish you a Happy New Year...

Or Why the long face? The Commission has launched a slew of figures today and, how can I put it they don't make particularly happy reading,
1) December 2007: Economic sentiment continues to weaken in both the EU and the euro area

In the EU, managers' production expectations and their assessment of order books deteriorated, contributing to the overall decline in industrial confidence.

2)December 2007: Business Climate Indicator for the euro area declines in December.

The decrease in the BCI is essentially caused by a worsening of industry managers' assessment of the production trend observed in recent months. To a lesser extent, managers' assessments of their production expectations and total order books also contributed to the decline.

3) Industrial producer prices up by 0.8% in euro area.

In November 2007 compared with October 2007, the industrial producer price index1 rose by 0.8% in the euro area (EA13) and by 1.1% in the EU272. In October3 prices increased by 0.7% in the euro area and by 0.9% in the EU27.

All very positive stuff you must agree.

This will annoy the tax harmonisers

Cripes, I need to get posted to Bulgaria which this week has introduced a 10% flat rate on its income tax.

From January 1 2008, income of physical persons in Bulgaria will be taxed at a flat tax rate of 10 per cent, Parliament decided on December 17, when it accepted in second reading changes to the Law on taxation of income for physical persons.

Income from life-insurance contracts after the end of the contracts, would be taxed at 7 per cent, Dnevnik dialy said.

Income taxes on dividend
and liquidation of shares will be five per cent in 2008.

If nothing else this will cause further headaches in Brussels where the rise of tax harmonistaion up the EU's agenda continues in its inexorable fashion.

Post Script
OK so a Swiss Canton has trumped that with a 1.8% rate - but you would have to live in Obwalden which has a population of 33,755 and is, dare I say it quite quiet.

Now tell me why is it that the idea of a flat tax is so scary in the UK?

It appears that being in charge is hard work

This FT Editorial is bang on the money when it describes our friends/competitors on the economically in-Continent,

The core eurozone countries – Germany, France and Italy – find it difficult to reform when times are bad. Invariably, governments intervene to protect voters from the downturn. Worse, these countries also find it hard to reform in good times. Governments often confuse a cyclical upturn with a secular improvement, and ease up on necessary but uncomfortable reforms.

No shit Sherlock

Hat tip to Mr Wood,
"In fact, Germany was, despite the tax increases, again the strongest economy among the eurozone’s big three", says Anatole Kaletsky in today's Times.

As was pointed out to me that is quite an achievment on the part of Germany, to be despite everything the biggest economy in the Eurozone... What France, Italy and Poland haven't overtaken them?

Ahem
Please understand that when I write Poland, I mean Slovenia. Thanks Mike