French financial sector condemns Sarkozy on planned transaction tax

Jan 8, 2012, 11:36 GMT

Paris - An organization representing the French financial services industry on Sunday denounced President Nicolas Sarkozy's threats to go it alone on a financial transactions tax, warning it could lead to the offshoring of investment activity.

Paris Europlace, an organization that lobbies on behalf of Paris financial market, said any so-called 'Robin Hood' tax that applied to France only, and not the whole of Europe, 'would weaken the French economy.'

The organization, which includes all France's top banks and big companies as members, was reacting to Sarkozy's threat Friday to forge ahead with the tax without other European countries if European Union members failed to agree on the measure.

'France will not wait for the others to agree,' he said.

Junior minister for housing Benoist Apparu said Sunday that a draft text on a tax would be discussed by the French cabinet 'probably in February.'

Apparu dismissed the objections expressed by France's financial actors.

'It's not because financiers are saying 'No, we don't want to be taxed' that we will listen to them,' Apparu told Radio J, a Jewish radio station in Paris.

Sarkozy and German Chancellor Angela Merkel are expected to discuss the issue at a meeting in Berlin on Monday.

Both leaders have been pushing for such a tax - which Britain and Sweden oppose - but Germany insists on the need for a Europe-wide solution.

Paris Europlace argued that the current financial crisis was rooted in the US sub-prime mortgage crisis of 2008 and in excessive risk-taking by British and US investment banks.

'A tax specifically punishing the French financial industry would be inappropriate,' it argued.

If this tax were applied solely in France, it would 'invariably' lead to a relocation of financial activity to the 'major global financial markets,' the organization warned.

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