France financial transaction tax push hits resistance

PARIS Fri Jan 6, 2012 8:48pm GMT

France's Finance and Economy Minister Francois Baroin attends the 4th annual New World conference in Paris January 6, 2012. REUTERS/Benoit Tessier

France's Finance and Economy Minister Francois Baroin attends the 4th annual New World conference in Paris January 6, 2012.

Credit: Reuters/Benoit Tessier

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PARIS (Reuters) - France said on Friday it aimed to push ahead with a new tax on financial transactions even without its EU partners on board, although Germany and Italy stuck to the idea of a tax across the 27-nation bloc in the face of stiff resistance from Britain.

Presidential adviser Henri Guaino said France would take a decision on the so-called "Tobin tax" by the end of January to set an example for the rest of Europe. French Finance Minister Francois Baroin said the aim was to have a tax in place this year, at least in France.

"Decisions will be taken by the end of January as far as France is concerned," Guaino told RMC radio. "France will take the lead on this issue. We will see how it can be applied."

"It's better if Germany is involved. I hope we can do it with Germany. We will keep discussing it in the coming days and weeks, but France is ready to lead by example on this front and hopes it can bring others along," he said.

The idea will be discussed when President Nicolas Sarkozy and German Chancellor Angela Merkel meet on Monday in Berlin and at a meeting of the European Council in Brussels on January 30.

President Nicolas Sarkozy said in his New Year's address that financial institutions should be made to help repair the "damage" they caused in the global financial crisis, and called the transaction tax a "moral issue."

Echoing that, Baroin told an international forum in Paris that the financial industry had to bear some of the cost of the crisis. "We want to go fast. This tax will see the light during the course of 2012."

In Berlin, Merkel's spokesman Steffen Seibert said that the German government aimed to get clarification in the first months of the year on whether the financial transaction tax could be applied across the EU.

"It is the explicit goal of the government to achieve an introduction of a financial transaction tax in the EU," Seibert told a regular news conference.

Italian Prime Minister Mario Monti said Rome had changed tack since his predecessor Silvio Berlusconi stepped down and now backed the push for a financial transaction tax, but he also warned against countries going it alone.

"We need a European standpoint which we all work towards," he said following talks with French Prime Minister Mario Monti.

Czech Prime Minister Petr Necas, speaking at the same forum as Baroin, appeared to pour cold water on the idea of an EU-wide tax, however. "What we do not need are more taxes which apply only to the European Union," he said.

The EU's executive European Commission formally adopted plans in September for a financial transaction tax, which will need unanimous approval from EU states. Under the plan, stock and bond trades would be taxed at the rate of 0.1 percent, with derivatives taxed at 0.01 percent.

The Commission said the tax would be imposed on all transactions in financial instruments between financial firms when at least one party to the trade is based in the bloc.

However, the prospect of the tax being applied across the European Union appears unlikely in the short term because Britain has said it will only support a tax which is applied globally, while banks call it nonsense.

In an interview published last month, German Finance Minister Wolfgang Schaeuble said Germany would push for a financial transaction tax to be introduced at EU-level, or at least in the euro zone.

If hurdles proved to be too high, then Germany and France alone would seek to apply the tax, he told Bild am Sonntag newspaper.

(Additional reporting By Elizabeth Pineau, Daniel Flynn, Yann Le Guernigou and Matthias Blamont in Paris and Annika Breidthardt in Berlin; Writing by Nicolas Vinocur and Leigh Thomas; Editing by Catherine Evans)

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Comments (6)
Pablito wrote:
Hmmm he would do well to remember Mitterrands experiment and how successful that was…although I would class Sarkozy more as a Fascist than a Socialist…

Jan 06, 2012 4:32pm GMT  --  Report as abuse
SCSCSC wrote:
If we want to review waste and save money, then let us look at the CAP.

Why does a G7 economy like France have a major industry subsidised by other EU members?

Jan 06, 2012 4:39pm GMT  --  Report as abuse
SCSCSC wrote:
Continual French sniping at the UK has been nothing short of disgusting. I have joined a new campaign that is boycotting French goods.

My family and friends no longer buy anything French. Perhaps this is something that that little French pygmy, Sarkozy, will understand?

Jan 06, 2012 5:03pm GMT  --  Report as abuse
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