Alone But Determined, Sarkozy Pushes Forward Talk Of A Tobin Tax
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French President Nicolas Sarkozy is alone in his push for a Tobin tax, or a tax on financial transactions, but he believes that his country will lead the EU forward – much to the ire of his English counterpart.
French President Nicolas Sarkozy is alone in his push for a Tobin tax, or a tax on financial transactions, but he believes that his country will lead the EU forward – much to the ire of his English counterpart.
In the words of the Financial Times, “Britain and France are set for another major European clash”. Sarkozy is pushing forward a new eurozone-wide financial transaction tax, and is looking to include it on the agenda of a European summit in Brussels on the 30th of January, putting him directly at odds with British prime minister David Cameron who is vehemently against the idea.
“This summit is supposed to be about boosting Europe’s growth and competitiveness,” said an ally to the British prime minister. “I’m not sure that introducing new taxes really gets to the heart of that agenda.”
Sarkozy, however, has managed to gain the endorsement of German Chancellor Angela Merkel.
Speaking at a joint press conference with Merkel, the first meeting of the two leaders for the New Year, Sarkozy pledged to champion the tax unilaterally, even if the other European countries declined. He said:
[quote] If we don’t set the example, it will not be done. We have no doubt we are going to start a trend in the eurozone for everyone to adopt this tax, which is exactly what is needed. [/quote]As several eurozone countries struggle to raise funds to meet their debt obligations, governments have found it reasonably suitable to tax bankers and financial institutions, rather than hard-pressed voters.
Germany has agreed to the plan, but only in principle, provided a broad consensus is achieved within the EU and the G20.
Vowing to veto any such EU-led transaction tax, Cameron fears the tax could lead to an exodus from the London business market – a key financial sector to the country’s economy.
[quote]However, analysts have pointed out that should France go ahead with the largely business-unfriendly financial tax, Britain only stands to gain a competitive edge over France.[/quote]Governments have toyed with taxing financial transactions since the idea was first mooted by American economist James Tobin in the 1972.
In November last year, Microsoft founder Bill Gates lent his weight in support for a Tobin tax. Speaking at an address to G20 leaders, at the invitation of Sarkozy himself, Gates said the “innovative financing” could be used to fit climate change and poverty in developing nations, while ensuring indebted nations would continue to meet their aid pledges to the poor.
Related News: What Is A Tobin Tax, And Why Does Bill Gates Back It?
