France eyes all securities with Tobin tax
PARIS (Reuters) - France wants to target bonds and derivatives, as well as stocks, with a new tax on financial transactions which the conservative government hopes to introduce before an April presidential election, Finance Minister Francois Baroin said on Tuesday.
President Nicolas Sarkozy's government is keen to push ahead with a "Tobin tax" even without its European Union partners, but the daily Le Monde reported on Monday that such a tax could be limited to the purchase of shares.
"We want it to be broad -- stocks, bonds and derivatives," Baroin told France's i<Tele television.
"We want, along with Germany, to put it into place, if possible at European Union level, otherwise in the euro zone, under the swiftest possible timetable, which for France means putting it into place in 2012," he added, a day after Sarkozy discussed the idea with his German counterpart Angela Merkel.
Baroin said a bill should be ready in February and that he would go to Berlin on Thursday to work on the details of the tax and the timeline for putting it in place.
"What I can tell you is that France will be the first country to put this financial transaction tax in place this year," Baroin said later in a question and answer session at parliament.
Michael Meister, a senior lawmaker from Merkel's Christian Democrats said on Tuesday the party will push for a transaction tax in Europe even though her junior coalition partners oppose the levy. "It will happen," Meister said.
The tax measure is one of a flurry of ideas unveiled by the energetic Sarkozy since the New Year started, including plans to improve labor market flexibility and to raise sales taxes to ease the burden on companies of financing the welfare state.
Sarkozy has long been an advocate of the so-called "Tobin tax," pushing for it at Group of 20 level during France's presidency of the economic grouping last year, but had thus far sought to implement it at pan-European level at the least.
"Evidently France should do it along with others. But, my dear compatriots, if France waits for the others to decide to tax finance, finance will never be taxed," Sarkozy said in a New Year's speech in the eastern city of Mulhouse.
"France will not just talk about it, France will do it."
Le Monde had quoted an unnamed government minister as saying the new tax would be limited to reinstating a stock exchange tax that was abolished in 2008. That could indicate that a French Tobin tax might be created in two stages.
Parliament reopens on Tuesday after the end-year break and will run until February 24 as Sarkozy hopes to push through new legislation on labor market flexibility and welfare financing, as well as the financial transaction tax, ahead of the April 22 election.
Sarkozy is expected to confirm in late February or early March that he will run for a second term against Socialist challenger Francois Hollande, who is ahead in opinion polls.
Budget Minister Valerie Pecresse told France 2 television that a planned overhaul of welfare financing, to shift the burden from companies and reduce their competitive disadvantage, would "inevitably" mean a rise in value-added sales taxes.
Sarkozy is set to discuss his various reform plans, including the Tobin tax idea, with trade union leaders at a January 18 meeting, which could lead to some watering down.
(Reporting by Yann LeGuernigou in Mulhouse and Catherine Bremer in Paris; Additional reporting by Leigh Thomas; Editing by Catherine Evans)
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