Sarkozy Renews Drive For Financial Transactions Tax

by Ulrika Lomas, Tax-News.com, Brussels

27 January 2011

During a recent press conference presenting France’s presidency of the G20 and the G8, French President Nicolas Sarkozy once again underlined France’s support for the introduction of a tax levied on financial transactions.

According to Sarkozy, France’s ambition for its presidency is simple: in a new world, marked by an extraordinary change in the balance of global economic powers, there is a need for new ideas.

In a totally interdependent and increasingly volatile world, instability is accelerating at an alarming pace, with graver consequences, Sarkozy noted. Sarkozy explained that there is currently volatility on the currency and energy commodities markets, as well as in financial and banking crises. There are also global challenges currently facing the world, he added, including climate change and development challenges, demanding global responses.

Sarkozy acknowledged that considerable progress has already been made, notably in the area of financial regulation, with the introduction of new bank capital rules, the regulation of hedge funds, the introduction of bank levies designed to limit systemic risk, as well as the capping of bonuses.

Highlighting the need to find innovative sources of financing, President Sarkozy stressed that France is firmly in favour of the introduction of a tax imposed on financial transactions. France considers such a tax to be 'moral' given the financial crisis, Sarkozy continued, and that it would discourage speculation while generating new resources for development efficiently.

All too aware of the need to convince fierce opponents and adversaries of the benefits of the tax, Sarkozy expressed his willingness to discuss other solutions, even if this tax – on financial transactions – appears to be the best formula.

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