ECOFIN:EU Finance Ministers Clash On Financial Transaction Tax

[dipsydoodle]

Source: WSJ

BRUSSELS (Dow Jones)--European Union finance ministers clashed Tuesday over a proposal to implement a financial transaction tax only days after the U.S. declined to give such a levy a firm backing at a summit of the world's 20 leading and developing economies.

France and Germany have championed the tax in recent months, with French President Nicolas Sarkozy describing it as technically possible, financially necessary and morally unavoidable. He said the tax could be implemented as soon as 2012.

Meanwhile, big European economies outside of the euro zone reiterated their stand against the tax at a meeting of finance ministers here in Brussels.

Sweden's finance minister Anders Borg went so far as to doubt the calculations in the proposal made by the European Commission. He said there is a risk the commission is underestimating the cost for growth and overestimating the revenue gains from such a tax. Borg also said a transaction tax would reduce turnover on the secondary market for government bonds, which would push up borrowing costs, further exacerbating the sovereign debt crisis.

Read more: http://online.wsj.com/article/BT-CO-20111108-708596.html

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Osbourne won't agree unless the US does too : he's afraid of flight from London as a financial centre.

The US won't agree for its own reasons.

[dkf]

1. Whoever doesn't have the tax will get all the jobs.

[Celefin]

3. and will have to bail all that 'talent' out when they screw up next time. Go for it. -nt-

[Lars77]

2. This tax is crucial. But there is no way the US will agree to it.