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France

Finance ministry to raise 360 million euros from trader bonus tax

Latest update : 2010-01-12

France expects to raise 360 million euros (522 million dollars) from its one-off tax on bank bonuses that will apply to some 2,500 traders, French Finance Minister Christine Lagarde said in Tuesday's issue of the French daily Le Figaro.

AFP - France expects to raise 360 million euros (522 million dollars) from its one-off tax on bank bonuses that will apply to some 2,500 traders, Finance Minister Christine Lagarde said Tuesday.
  
The minister dismissed suggestion that banks will leave France in protest at the measure and said France will turn up the pressure on the United States to rein in bank bonuses during a Group of 7 meeting in February.
  
"I don't believe that there will be an exodus of traders," said Lagarde in the interview to the pro-government Le Figaro newspaper.
  
"Where would they go? To London?" she asked, noting that Britain was also applying the bonus tax.
  
The 50-percent tax will apply to bankers who have earned a bonus of more than 27,500 euros and for the time being there are no plans to extend it beyond 2010, she said.
  
"We are counting on an influx of 360 million euros, of which 270 million will be set aside to support the Guarantee Fund for Depositors to strengthen the security of account-holders," she said.
  
The French government last month approved a draft bill for the new tax that will be contained in new legislation on financial regulation due to go before parliament this month.
  
French President Nicolas Sarkozy and British Prime Minister Gordon Brown agreed during a meeting in Brussels in December to tax bankers' bonuses as part of a drive to make banks more responsible.
  
"We wanted an exceptional tax to address exceptional circumstances," Lagarde said. "That was the objective guiding us."
  
Leading French bank BNP Paribas sparked public outrage here in August over its plan to pay more than a billion euros in bonuses to its staff.
  
It argued it was acting within Group of 20 rules and warned that foreign  banks might poach its best staff if they were denied decent bonuses. But that failed to placate public opinion.
  
The US administration has balked at such measures targeting banks but Lagarde said American public opinion was behind them.
  
She suggested that President Barack Obama would now turn his attention to financial regulation, having completed health care reform.
  
"I can't imagine that we would allow such excess from American banks. It would politically unmanageable in a courty where unemployment has reached 10 percent," she said.
  
The issue will be discussed at the G7 meeting of finance ministers in Canada in early February, she said.
  
 

Date created : 2010-01-12

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