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. Last Updated: 07/27/2016

EU Agrees on Taxation Guidelines

BRUSSELS, Belgium -- European Union finance ministers have backed a proposal urging them to avoid short-term tax cuts that could undermine wider goals of balanced budgets and lower national debt, the EU's executive body said Monday.

The European Commission said ministers at a recent meeting had "broadly endorsed'' guidelines to ensure tax cuts by the 15 EU member nations did not threaten commitments to budget discipline. Reductions should focus on cutting labor charges, in order to reduce unemployment the Commission added.

The move attempts to make sure that treasuries will not use dividends coming from the revival of economic growth in Europe to finance "quick-fix'' tax cuts. Instead governments should work to speed up plans to cut budget deficits and lower public debt across the 11 euro-zone nations.