Merkozy open to eurozone FTT
Monday 9 January 2012 - by Andrew.Hickley@gfsnews.com
French Prime Minister Nicolas Sarkozy and German Chancellor Angela Merkel, who together have battled vigorously for an FTT to be applied to all 27 member states, told a press conference on Monday that they continued to support the levy's introduction.
The European Council requires unanimity in order for the tax to be implemented across the whole of the EU.
Sarkozy told the press conference that he remains "fully committed to the principle of a tax". Over the weekend French press have speculated that the country might take the unprecedented step of implementing the tax before their European counterparts, with Sarkozy admitting "if we don't set a good example, it won't happen".
"We believe that this [implementing the tax] will set in motion a dynamic within the eurozone which will give all member states an opportunity to implement this tax," he added.
Merkel added that a private sector rollover of Greek debt must be put in place "quickly" to ensure that the embattled country receives its next debt tranche.
Investors had agreed in principle to rollover 50 per cent of their Greek debt holdings in an effort to reduce Greece's debt-to-GDP ratio to around 120 per cent from the current 160 per cent.
There have recently been suggestions that this figure may still prove too small to prove effective.
Richard Driver, an analyst at foreign exchange company Caxton FX, warned that negotiations over the rollover were likely to drag on despite Merkel's call for urgency.
"The chances are this Greek tragedy will go right down to the wire and it will be a case of who blinks first," he said.
"A Greek default beckons if the next tranche of aid under the first Greek bailout isn't released, so the pressure is really going to intensify in the next few weeks."
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