Brussels, 09/01/2012 (Agence Europe) - At the press conference after their meeting in Berlin on Monday 9 January, German Chancellor Angela Merkel and French President Nicolas Sarkozy displayed a certain unity of stance on the need for a financial transactions tax (FTT), if not among all member states then at least in the eurozone. Sarkozy, with one eye on the presidential elections at the end of April, wants to force the pace on how the tax is to be applied, even to the extent of going it alone initially, while Merkel once again stated her preference for concerted European action.
The French president re-stated his determination to move quickly, confirming that France, even if it has to act alone initially, wants to apply “the draft directive on the creation of a financial transactions tax (FTT) as proposed by the Commission”. “If we don't lead by example, it will never come about”, said Sarkozy, indicating that, in this way, he hoped to coax along his eurozone partners to adopt “this very timely tax” and to move public opinion throughout the world so that this tax is put in place globally so that compensation can be made for “the scandalous, inadmissible financial deregulation” and to make sure that “those who helped put us in the situation in which we now find ourselves” across the globe make their contribution to redressing the situation. Speaking about the arrangements for applying the proposal and the tax basis, Sarkozy referred back to the draft directive brought forward by the European Commission in September of last year, implicitly rejecting rumours of a French tax restricted to a stock exchange tax applied only to shares and not to sovereign bonds or derivatives. How the revenue generated by the tax is to be used has always been a matter of some disagreement between the two countries, with Germany not wishing to see this money being paid into European coffers. Sarkozy said that there would be further discussion of this issue at the end of this month, as he would not take any decision until he had heard what the social partners had to say at the social summit on 18 January.
The German chancellor was more guarded: the French approach was, in her view, “a fine initiative for turning words into action”. Her government, however, preferred concerted European action. “From the German side, the aim is to have a statement of intent from (EU) finance ministers by the start of March”, Merkel said. “Personally, I favour the tax in the eurozone, but we have not yet come to agreement in the federal government”, she said, adding that she would push for this. “If we don't manage to persuade the 27 member states - it would be better if all 27 were involved - we will consider how to take things forward”. She went on to state that she was in full agreement with Sarkozy on the principle and that they would continue working together at European level to establish the tax.
The German position for a European approach is backed by Italian Prime Minister Mario Monti, who was in Paris on Friday and will be in Berlin on Wednesday. Monti said that his government, unlike his predecessor's, was willing to work for the creation of an FTT at European level, categorically ruling out applying the tax at national level alone. “Europe has to play its part, and quickly”, he said, indicating that, in this approach, it would help Italy to work in close collaboration with Germany and France. The meeting of the three leaders in Rome on 20 January is expected to allow a common position to be agreed on the tax which will be on the agenda of the Ecofin Council on 24 January and of the European Council on 30 January.
Agreement among the three countries will be very necessary against the veto that UK Prime Minister announced, on Sunday 8 January, he would put on the creation of the tax in the EU. His objections are well known: an EU-wide financial transactions tax would damage the City of London, with the possibility of relocation of business to other centres. The UK is also worried about a tax applied solely in the euro area since this could indirectly affect the operations of British institutions operating on the continent, particularly if the merger of the NYSE Euronext and Deutsche Börse were to come about.
In his forthcoming visit to London, Monti will try to re-ignite the dialogue between the UK government and the other 26 members on this issue. (FG/transl.rt)