Cheating Austrians

As if they didn’t know that membership of the EU is all about solidarity, the Austrians have been making hay at the expense of their partners. Shocking. They have, can you believe it, decided that they don’t need to steal as much of their citizens cash as their pillaging Germany neighbours, with the upshot that they are becoming a magnet for investment.

The differences in the European Union over harmonising company taxes looked set to grow yesterday after Austria published figures showing a sharp increase in the number of foreign investors last year. The rise has been widely attributed to the country's landmark tax reform, slashing company taxation from 34 per cent to 25 per cent - one of the lowest rates in the EU - from the beginning of this year.

Austria is of course reacting to the tax slashing activities of its Eastern neighbours. Across Central and Eastern Europe, governments are discovering something that Ronald Reagan, or for that matter Nigel Lawson could have told them about taxation. The lower the rate the better the take. Unfortunately the Time Warp 68 generation that runs the EU is far too ignorant of mere matters of economics to understand this and is instead bent on harmonising taxes. No prizes for guessing whether that would be up or down.