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Cameron says EU-wide financial tax would harm Europe

09 January 2012, 01:08 CET
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Cameron says EU-wide financial tax would harm Europe

David Cameron - Photo EU Council

(LONDON) - British Prime Minister David Cameron said Sunday he would block any attempt to introduce an EU-wide financial transaction tax because he fears it will harm jobs and prosperity in Europe.

Cameron said countries such as France pushing for the introduction of such a levy were welcome to go ahead and introduce it within their own borders.

But implementing a tax in the European Union when countries in the rest of the world were not bound by it would have a negative effect on jobs and prosperity in Europe, he said.

"If the French themselves want to go ahead with a transactions tax in their own country then they should be free to do so," Cameron said in an interview with BBC TV.

"But the idea of a transactions tax put in place only in Europe that doesn't include other jurisdictions, what that would do is it would cost jobs, it would cost us tax revenue, it would be bad for the whole of Europe.

He said he would block any attempts for an EU-wide transaction tax.

"We would see a whole lot of institutions and activities go to other jurisdictions, to other places," he said.

Britain fears that if a financial transaction tax is introduced across the 27-nation EU, then banks and financial institutions operating in London would leave and move to countries such as Switzerland or China to avoid it.

Such fears about the powers of the City of London financial district being curbed were behind Cameron's veto of a new EU-wide treaty change to tackle the eurozone crisis at a Brussels summit in December.

The move sparked questions about Britain's future in the bloc.

President Nicolas Sarkozy said Friday that France should not wait for other European countries to get on board with what has been dubbed a "Robin Hood tax" or "Tobin tax", after Nobel Prize-winning economist James Tobin, that would help reduce budget deficits.

But a French financial association, Association Paris Europlace, spoke out on Sunday against France introducing such a tax unilaterally, saying it would hurt the country's economy unless it was implemented across the EU.

"If this tax was applied only in France, it would inevitably lead to an exodus of banks, insurance companies and management," the association said in a statement, adding that it "would reduce ... the role of Paris in the European and global economy".

For its part, the European Commission has called for a "concerted approach" to the issue.

And Italian Prime Minister Mario Monti said his country was open to the idea but only if the measure is part of an EU-wide effort.

"The government headed by (my predecessor Silvio) Berlusconi had voiced its opposition at the EU level, I however have expressed the Italian government's openness on that issue," Monti said on RAI 3 public television.

"We are prepared to work on it but never, and I mean never, if it was to apply only to Italy. By contrast, at a time when it is in our interest to cooperate closely with Germany and France, why not," he said.

"It has nothing to do with the fact that I was a student of Professor Tobin," said Monti, a former European commissioner who took office as Italy's prime minister and finance minister in November.

Monti had already said on Friday he thought such a decision needed EU-wide backing.

"It is necessary that the different countries do not go it alone in the application of this tax. I believe in a European perspective," he had said, voicing a position echoed by Germany.

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