LEAD: Cameron: German-French transaction tax plans are "madness"

By Matthias Armborst Jan 26, 2012, 15:40 GMT

Davos, Switzerland - British Prime Minister David Cameron denounced plans by France and Germany for a financial transaction tax as 'madness' on Thursday and made clear he does not see eye to eye with Berlin on solving the euro crisis.

In a speech delivered to the World Economic Forum in Davos, Switzerland, he also demanded a higher 'firewall' against attacks from financial markets, echoing calls by the International Monetary Fund (IMF) for European countries to increase their emergency fund.

German Chancellor Angela Merkel had warned in Davos on Wednesday that her country would not be able to bear unlimited financial burdens.

Cameron attacked his French and German colleague's tax plans, saying: 'Even to be considering this at a time when we are struggling to get our economies growing is quite simply madness.'

He warned that a financial transaction tax could cost the European Union's economy 200 billion euros (263 billion dollars) and up to 500,000 jobs.

London hosts one of the biggest financial centres in the world, and there are concerns in Britain that such a tax could prompt businesses to move elsewhere.

'Tinkering here and there and hoping we'll drift to a solution simply won't cut it any more. This is a time for boldness, not caution,' he said.

Cameron defended his controversial blocking of an EU-wide treaty for overcoming the sovereign debt crisis in December, arguing there had not been adequate safeguards for countries like Britain, which are not members of the eurozone.

He stressed, however, that Britain would not leave the EU: 'So let me be clear: We want Europe to be a success.'

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