Sarkozy says France will lead way with 'Tobin tax'


Nicolas Sarkozy fanned the flames of a lingering cross-Channel row with David Cameron yesterday as he said a new "Tobin tax" on financial transactions was "exactly what was needed".

The French President – who snubbed Mr Cameron over his veto of a new European treaty in December – is aggressively pushing for the new tax as he wages his campaign against "Anglo-Saxon capitalism". The City of London is deeply opposed to such a move.

Speaking at a joint press conference with the German Chancellor Angela Merkel after their first face-to-face talks of the new year, he pledged to push ahead with the tax unilaterally if other states dithered. He warned: "If we don't set the example, it will not be done. We have no doubt we are going to start a trend in the eurozone for everyone to adopt this tax, which is exactly what is needed."

Britain will veto such a tax at European Union level unless it is adopted on a global scale, fearful of its impact in the City. The issue look sets to catch fire again when EU leaders convene for their first summit of 2012 at the end of January.

Mrs Merkel also fired a warning shot to Greece as she said further aid to Athens under its second €130bn (£107bn) bailout would not be released without faster progress on the "voluntary" 50 per cent losses that private investors have agreed to take on their Greek debt. Banks, insurers and investment funds have been in talks with the Greek government for weeks, although there are suggestions that they may have to take a bigger hit.