A TAX ON HARMONY

In a short space of time, Oskar Lafontaine, has rocked a lot of boats. The new German finance minister has already stepped on toes at the Bundesbank and the European Central Bank, calling for lower interest rates and upsetting, the monetarist theology of Europe's top central bankers. He has put American, as well as European backs up, by proposing target zones for the euro. The more hysterical parts of the UK press are already in quite a tizzy. Next on his list appears to be the UK Treasury. Mr Lafontaine, quite reasonably, has fixed his attentions on German unemployment. The new German government wants to boost European demand through lower interest rates. If it does not get its way, the stability pact will look shaky. But Mr Lafontaine's goals are not exclusively macroeconomic. He also intends to use the Germany presidency of the European Union - which begins on January 1, 1999 - to push for harmonisation of tax rates across the EU.