France seeks financial transaction tax decision by end-Jan

PARIS Jan 6 (Reuters) - France aims to take a decision on financial transaction taxes by the end of January to set an example for the rest of Europe, even if Germany does not follow immediately, presidential adviser Henri Guaino said on Friday.

The idea, which is unpopular with Britain, will be discussed when President Nicolas Sarkozy and German Chancellor Angela Merkel meet next Monday in Berlin and at a meeting of the European Council in Brussels on Jan. 30.

"Decisions will be taken by the end of January as far as France is concerned," Guaino said. "France will take the lead on this issue. We will see how it can be applied."

"It's better if Germany is involved. I hope we can do it with Germany. We will keep discussing it in the coming days and weeks, but France is ready to lead by example on this front and hopes it can bring others along," he said.

President Nicolas Sarkozy, in his New Year's address, said that financial institutions should be called upon to help repair the "damage" they caused in the financial crisis, calling the transaction tax a "moral issue".

France's Europe minister, Jean Leonetti, said on Wednesday that a tax would be in place by the end of 2012, a year ahead of the target set by Finance Minister Francois Baroin. He was seemingly referring to a tax at European level but did not say so explicitly.

The EU's executive European Commission formally adopted plans in September for a financial transaction tax, which will need unanimous approval from EU states. Under the plan, stock and bond trades would be taxed at the rate of 0.1 percent, with derivatives taxed at 0.01 percent.

The Commission said the tax would be imposed on all transactions in financial instruments between financial firms when at least one party to the trade is based in the bloc.

However, the prospect of the tax being applied across the European Union appears unlikely in the short term because Britain has said it will only support a tax which is applied globally, while banks call it nonsense.

In an interview published last month, German Finance Minister Wolfgang Schaeuble said Germany would push for a financial transaction tax to be introduced in the European Union, or at least in the euro zone.

If hurdles proved to be too high, then Germany and France alone would seek to apply the tax, he told Bild am Sonntag newspaper. (Reporting By Elizabeth Pineau and Nicholas Vinocur)