As we go to press, French President Nicolas Sarkozy has started making good on his promise to implement a 0.1% transaction tax on the purchase of shares in French companies — a tax that UK Primer Minister David Cameron says will simply drive business to London.
A French radio station posted text of what it says is a draft bill, and it shows the tax applying not to shares traded only in France, but to shares of French companies with a market capitalization of €1 billion or more, regardless of where the shares change hands. That may mean that shares traded in London are still subject to the tax.
More importantly, French Finance Minister Francois Baroin says that Austria, Belgium, Finland, Germany, Greece, Italy, Portugal and Spain all have endorsed France’s effort to implement such a transaction tax across the European Union. That’s nine member states — enough to implement the tax within their block, and possibly in a way that will force implementation within countries outside the block.