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PARIS, Nov 27 (Reuters) - A broad cut in French value-added tax (VAT) similar to a reduction announced in Britain is not the right solution for protecting France's economy from the global crisis, Budget Minister Eric Woerth said on Thursday.
The UK cut VAT by 2.5 percentage points to 15 percent on Monday, the lowest level allowed under EU law, as part of a package of measures to kick-start the British economy.
"I'm not favourable to a cut in VAT -- the British are doing it on the whole of their VAT -- I'm not in favour because consumers do not see the effect," Woerth said in an interview on RMC radio and BFM television.
"There are distribution networks and prices that adjust in different ways and your cut of 2 percentage points in VAT translates into increased margins for certain distributors or producers," he said.
President Nicolas Sarkozy is expected to announce a stimulus package for the French economy soon. Sarkozy had already signalled he was unlikely to follow Britain's lead in cutting VAT across the board.
Sarkozy said his stimulus plan would include measures to boost the construction and car sectors, especially auto suppliers, which have been particularly hard hit by the recent economic slowdown.
In Britain, the VAT cut will take effect on Dec. 1 and last 13 months, providing an incentive to consumers to bring forward purchases. The hope is that this will help retail sales over the key Christmas period.
But Woerth said he did not think such a response would work in France. "It's not the right answer to support the French economy at this time of crisis," he said. (Reporting by Estelle Shirbon, Editing by Marcel Michelson/David Stamp)