FRENCH PROPOSE NEW TAX HAVEN

French Prime Minister, Alain Juppe, hopes the announcement will go some way toward placating Corsican nationalists, whose violence over the past year has accounted for forty deaths.

The French government hopes the tax haven status will be implemented in June of this year but must seek European Commission approval of the plans before any concrete steps can be taken.

As well as appeasing the nationalists, the French hope that development of the island as a tax haven will give an economic boost to the area which costs the French government $1.4bn per year in subsidies. It is also hoped that an end to intimidation, violence and the bombing of vacation homes will succeed in attracting Italian and British tourists back to the island. Many of these fled to neighbouring Spain at the height of the troubles.

Corsica will probably need to enjoy a period of undisturbed calm and peace before expats and international travellers give up the cheaper living costs in Spain and return to the island. A package of other benefits planned by the French government, including aid for small businesses will also be implemented as leverage.