Sarkozy Unilaterally calls for 0.1% Tax on Financial Transactions in France

French president, Nicolas Sarkozy, is championing a new tax regulation that will impose a 0.1% tax on financial transactions.

The European Commission proposed a tax of 0.1% on equity and bond transactions, and a 0.01% tax on derivatives. It is thought that these taxes could raise up to € 55 billion a year in government revenue.

Speaking on National television in Paris yesterday, Sarkozy stated the radical move was to hold financial institutions accountable for remedying a situation, they largely helped to create.

His words, “What we want to do is provoke a shock, to set an example,…there’s no reason why deregulated finance, which brought us to the current situation, can’t participate in the restoration of our accounts”.

The tax is meeting opposition from the country’s biggest banks. Jean-Pierre Jouyet, president of the Autorite des Marches Financiers, France’s financial regulator has warned that the tax will serve to chase some business away from France especially Asset Management focused businesses.

France is unilaterally pushing for the reform as other Euro zone Nations have not been as vocal as Sarkozy on the issue.