Global Financial Strategy - Sarkozy to introduce French FTT in August

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Sarkozy to introduce French FTT in August

Monday 30 January 2012 – by Andrew Hickley

Nicolas Sarkozy - photo by European Commission

French President Nicolas Sarkozy has announced he will introduce a 0.1 per cent Tobin tax in the country regardless of whether other European countries implement the levy.

Speaking on French television, Sarkozy announced the introduction of the financial transaction tax from August.

“What we want to do is create a shockwave and set an example that there is absolutely no reason why those who helped bring about the crisis shouldn’t pay to restore the finances,” he said in a primetime interview on Sunday.

“We hope the tax will generate €1bn ($1.3bn) of new income and thus cut our budget deficit.”

The levy will hit credit default swaps and speculative high frequency trades, he said. Reuters reported that it will not impact on bond trading, quoting a French official.

The tax, which he did not go into detail to explain, appears to differ from the European Commission’s proposals.

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Last year the EC put forward measures to introduce a 0.1 per cent tax on equity and bond trades, along with a 0.01 per cent tax on derivatives trading.

Sarkozy has consistently pioneered for a financial transaction tax to be implemented across Europe, though the measure has faced a backlash from countries including Britain and Sweden.

The French President was also unable to convince global leaders to introduce the measure when France held the G20 presidency last year.

Sarkozy’s announcement comes after German Chancellor Angela Merkel revealed she would “actively support” the President in his bid to win re-election with a series of joint campaigning appearances in the spring.

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