Finance Minister François Baroin signalled on Tuesday that nine eurozone governments are ready to press ahead with the introduction of a Paris-inspired financial transactions tax.

"/> Finance Minister François Baroin signalled on Tuesday that nine eurozone governments are ready to press ahead with the introduction of a Paris-inspired financial transactions tax.

" />
SHARE
COPY LINK

EC

France claims broad support for finance tax

Finance Minister François Baroin signalled on Tuesday that nine eurozone governments are ready to press ahead with the introduction of a Paris-inspired financial transactions tax.

France claims broad support for finance tax
Images of Money

Baroin’s office said the minister had written to the European Union’s current Danish presidency asking for examination of a draft law championed by President Nicolas Sarkozy to be examined by the summer.

The fact that nine countries are signatories to the letter is highly significant, as it paves the way for a special provision of the EU’s Lisbon Treaty that allows at least one third of the EU’s member states to trailblaze new laws by themselves.

This comes in the face of fierce opposition to an EU-wide tax from Britain, whose Prime Minister David Cameron said during the last EU summit that French banks would up and move to the City of London to escape the tax.

The so-called “enhanced cooperation” provision has already been used to overcome difficulties in harmonising some aspects of cross-border divorce law, and is also being used in moves to drive through a single EU patent despite decades-long objections.

The nine countries are: Austria, Belgium, Finland, France, Germany, Greece, Italy, Portugal and Spain.

The letter is signed by Italian Prime Minister Mario Monti and the finance ministers of the other eight, Baroin’s office said.

In it, they say a tax is necessary “to ensure a fair contribution from the financial sector to the costs of the financial crisis, but also to improve the regulation of markets.”

The nine are said to be giving their “full support” to a bid for EU governments to examine formal legislative proposals “in the first half of 2012.”

President Nicolas Sarkozy announced last month that a French financial transactions tax would take effect in August, saying it would add one billion euros annually to state revenues.

According to a draft of the French legislation obtained by BFM Business and published on its website, the 0.1 percent tax will apply to acquisitions of shares belonging to “companies whose headquarters are located in France and whose market capitalisation exceeds one billion euros.”

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

CREDIT RATING

Sarkozy plays down effect of AAA loss

President Nicolas Sarkozy appeared on Monday to accept that France is facing a downgrade of its triple-A credit rating, when he declared that he would overcome this challenge to his policy.

Sarkozy plays down effect of AAA loss

“It would be another difficulty, but not an insurmountable one,” he said in an interview with the daily Le Monde. “If they decide to take it away from us we’ll face the situation with sang froid and calm.”

Sarkozy, who is facing a tough re-election battle next year, has staked much of of his credibility on preserving France’s top debt rating.

But markets have not been convinced that the EU’s latest “fiscal pact” will be strong enough or quick enough to prevent the risk of a sovereign default in the eurozone, which would in turn damage French banks.

Two agencies, Standard & Poor’s and Moody’s, have warned that they are putting France and its EU partner’s debt under scrutiny, and markets see Paris as likely to drop one or even two rungs on the ratings ladder.

“What counts more than anything is the credibility of our economic policy and our determined strategy to reduce spending. We will scrupulously honour all the engagements that we have made,” Sarkozy said.

The French leader’s guarded admission follows those of several senior French officials who, over the weekend, appeared to be preparing the ground for the increasing likelihood of a credit downgrade.