France will 'go it alone' on tax plan

FRANCE is set to go-it-alone with its plan for a financial transaction tax in a move that has drawn fire from employers and financial institutions.

Although President Sarkozy is visiting Berlin today to lobby support from German chancellor Angela Merkel, he said on Friday: "We will not wait for all the others to agree."

Ms Merkel would prefer a Europe-wide agreement but the UK - with an eye to protecting the interests of the City of London - is unlikely to agree to a wide-ranging tax. However, Le Monde has suggested France could tax share transactions - in a move similar to the 0.5% stamp duty that already exists in London.

Sarkozy advisers say they could have a bill ready for parliament early next month - and the move would have the double bonus for him of acting against the money men who he blames for the financial crisis and also wrong-footing the Parti Socialiste which has long campaigned for a tax on transactions.

The plans have been criticised by Laurence Parisot, the president of employers' federation Medef, who said: "If we were alone [in imposing the tax] there would be an immediate massive move away [by financial companies, from France]. We would all be losers." She added it would be "a bad blow" for the economy.

Ms Parisot said any such tax would be better done across Europe as France going it alone "would not change much".

Financial businesses in lobby group Paris Europlace have said they are firmly opposed to a France-only transaction tax saying "if it is not imposed across Europe it will weaken France".

Gérard Mestrallet, chief executive officer of GDF Suez, said the global financial crisis started in the Americian market with problems with sub-prime loans and risks taken by "Anglo-Saxon" [British and American] banks. He said French financial institutions had better resisted the slump and added: "A tax, specifically sanctioning the French financial industry, would be inappropriate."