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FTT to be in place by 'end of year'

Wednesday 4 January 2012 - by Karina Whalley

Sarkozy and Merkel - photo by European Commission
A controversial European tax on financial transactions will be in place by the end of 2012 - a year ahead of schedule - according to a French minister.

France's minister for European affairs, Jean Leonetti told LCI television that the tax would be under discussion at the European Summit on January 30 despite Britain and Sweden's opposition.

"This is on the programme for the next European summit. Nicolas Sarkozy and Angela Merkel have decided on this and it will be put in place before the end of 2012," Leonetti said on the French television station on Wednesday.

Under initial proposals in September, the financial transaction tax - set at 0.1 per cent for standard transactions and 0.01 per cent in the case of derivative deals - is due to be rolled out by EU member states by 31 December 2013 if it goes ahead.

Leonetti claimed that France and Germany are in full agreement on the FTT and also told LCI: "I understand that the new Italian government... is not opposed to the idea."

In December, Sarkozy and Merkel called for the tax to be one of the measures underpinning a new EU governing treaty.

However British prime minister, David Cameron vetoed the treaty changes, fearful of the tax's impact on the City. Sweden and the UK are the only EU member states against an FTT.

In December, French finance minister Francois Baroin said he was working alongside his German counterpart, Wolfgang Schäuble, on a "complementary" initiative to the European Commission's original FTT proposal. Baroin says this will be presented on 23 January for implementation in 2013.

Schauble insisted that the two countries will fight for the tax to be introduced only in the eurozone if necessary.

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