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France ready to go solo on financial transaction tax

Latest update : 2012-01-07

French President Nicolas Sarkozy warned Friday that France would be willing to push through a new financial transaction tax on its own if the EU does not quickly agree on a joint tax.

AFP - France will go it alone if it can not convince its European partners to quickly impose a new tax on financial transactions, President Nicolas Sarkozy warned Friday.

"We won't wait for others to agree to put it in place, we'll do it because we believe in it," he said, branding it unacceptable that "financial transactions be the only transactions that are exempt from all taxation."

The French leader was speaking in Paris after talks with Italian Prime Minister Mario Monti. Earlier, both Italy and Germany had publicly urged EU members to agree a joint tax rather than impose one unilaterally.

"When you buy a flat, in every country in the world you pay a tax. When you go into a supermarket for food, you pay a tax. When you conduct a financial transaction, you pay no tax," Sarkozy continued.

"Who understands this? Who accepts it?" he demanded.

"This is why France is campaigning for a financial tax. I'm saying this with the approval of the minister of finance," Sarkozy added, referring to Francois Baroin, who had earlier vowed to impose the tax within the year.

Many activists in western countries have long campaigned for a small tax on financial transactions so as to raise funds for environmental and social measures that they say would compensate for the damage done by reckless speculation.

In recent years, some governments have taken up the campaign but most now intend to use the so-called "Robin Hood tax" to help reduce their budget deficits rather than embark on specific social programmes.

France and its major eurozone partners have supported the idea of the tax but now seem divided on how to approach the issue, with the major players in the bloc Germany and Italy openly advising caution.

"It is necessary that the different countries do not go it alone in the application of this tax. I believe in a European perspective," Italian Prime Minister Monti said in Paris before his meeting with Sarkozy.

In Berlin, German government spokesman Steffen Seibert told reporters that "the German position has been the same for a long time."

"We would like to see a global financial transaction tax but that is not possible at the present time. The German government would thus aim to introduce the financial transaction tax within the EU."

He noted that Finance Minister Wolfgang Schaeuble has said that Germany and France want to size up the situation within the EU in the first weeks or months of this year and assess how much support such a tax has.

For its part, the European Commission called on Friday for a "concerted approach" to the issue.

Sarkozy and Monti also said they would meet Germany's Chancellor Angela Merkel on January 20, three days before a meeting of the 17-nation eurozone and 10 days before a key European Union summit.

Germany, France and Italy are the three biggest economies in the eurozone. Within the European Union, but outside the single currency, Britain is opposed to transaction taxes being implemented across the 27-member EU bloc.

Date created : 2012-01-07


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