January 10, 2012
Nicolas Sarkozy wants to speed up the launch of the proposed tax on financial transactions in Europe because he thinks this might help his re-election bid. His meeting with Angela Merkel on Monday was a glorified campaign event, write German media. Merkel helped him out a bit, in a sign that the French-German axis remains intact at the start of a tough year.
French President Nicolas Sarkozy, facing a tough battle for re-election in just four months, used Monday's summit with German Chancellor Angela Merkel in Berlin as a campaign event to show voters back home that he's tackling the euro crisis, German media commentators said.
Sarkozy said last week he was ready to go it alone and introduce a financial transactions tax just in France if necessary rather than wait for the whole European Union to sign up to it -- an unlikely prospect given that Britain is refusing to impose such a tax for fear of damaging the City of London, Europe's biggest financial center.
Merkel, keen to show nervous markets that the Franco-German alliance is intact at the start of what promises to be another difficult year in the euro crisis, praised Sarkozy's stance and even made a minor concession, saying for the first time that she could envisage the tax being introduced just in the 17-member euro zone rather than the full 27-member EU.
The tax, based on concept proposed by US economist James Tobin who called for a tax on currency transactions in the early 1970s, has been under renewed discussion since 2011 when the European Commission proposed a plan to tax stock, bond and derivatives trades from 2014, potentially raising €57 billion ($73 billion), much of it from Britain, the region's biggest trading center.
Under the EU plan, which would need the backing of all 27 member states to become law, stock and bond trades would be taxed at the rate of 0.1 percent, with derivatives deals at 0.01 percent.
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