Sarkozy announces 0.1 percent transaction tax from August

(AFP) – 43 minutes ago

France's President Nicolas Sarkozy gets ready prior to the start of the one hour-long television interview (AFP/POOL, Lionel Bonaventure)

PARIS — French President Nicolas Sarkozy on Sunday announced plans to introduce a 0.1 percent tax on financial transactions to come into effect from August this year in France.

Sarkozy said he hoped to "create a shock" with the controversial "Robin Hood" tax and inspire other European countries to follow his lead, despite vocal opposition from other EU leaders.

He said in a television interview that the tax would enable French companies to keep jobs at home instead of outsourcing them abroad.

Advocates of the tax see it as a potentially significant revenue generator as well as a penalty against speculation, but critics say it could cause investors to pull their money out of countries applying it.

Some governments have in recent years taken up the campaign but most now intend to use the so-called "Robin Hood tax" to help reduce their budget deficits rather than embark on specific social programmes.

France and its major eurozone partners have supported the idea of the tax but now seem divided on how to approach the issue, with the major players in the bloc Germany and Italy advising caution.

Britain is opposed to transaction taxes being implemented across the 27-member EU bloc.

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