http://www.telegraph.co.uk/finance/economics/9048138/French-president-Nicolas-Sarkozy-to-bring-in-0.1pc-Financial-Transaction-Tax-in-August.html
President Nicolas Sarkozy, who is trailing heavily in the polls ahead of April's election, said France would go it alone in a bid to "create a shock" and inspire other European countries to follow his lead. That is despite vocal opposition from other EU leaders, not least David Cameron.
France's plans came amid an escalating row over German demands for independent scrutiny of Greece's finances and the ongoing lack of a firm debt-swap deal with private holders of Greek bonds.
Economy minister Philipp Roesler became the first German cabinet member openly to back calls for Greece to give up autonomous control of its budget as a condition of its second €130bn (£109bn) bail-out.
In an advance copy of an interview to be published in Der Bild on Monday, Mr Roesler is quoted saying: "If the Greeks aren't able to succeed themselves with this, then there must be stronger leadership and monitoring from abroad, for example through the EU."
Mr Roesler is chairman of the Free Democrats – the party sharing power with Chancellor Angela Merkel.
Germany's demands have sparked fury in Greece, with education minister Anna Diamantopoulou calling them "the product of a sick imagination" and finance minister Evangelos Venizelos claiming on Sunday that the country, with €350bn debts, was capable of sticking to its promises.
"Our partners know that European unification is founded on the institutional equality of member states and respect for national identity," he said before heading to a Brussels summit already threatened by strikes from three Belgian transport unions.
EU leaders plan to finalise two new treaties dealing with the euro crisis. The first, a "fiscal compact", aims to set new debt and deficit ceilings across the eurozone – though critics say it will prove as unworkable as the discredited stability and growth pact.
The second aims at establishing the eurozone's new bail-out fund, the European Stability Mechanism, due to come into operation in July with €500bn of funds – more than the current €440bn European Financial Stability Facility.
One obstacle to a second Greek bail-out has been the lack of an accord with its bondholders. On Sunday night, the Institute of International Finance said the two sides were "close" to completing a deal within the framework outlined by Luxembourg prime minister Jean-Claude Juncker. Creditors are said to be ready to accept an average coupon of 3.6pc on new 30-year bonds – below their previous demands of 4.5pc that was not acceptable to EU finance ministers.
http://www.guardian.co.uk/business/feedarticle/10066038
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Sarkozy, who is running far behind Socialist challenger Francois Hollande in opinion polls for the election, said he would raise the VAT rate to 21.2 percent from 19.6 percent from October to fund a reduction in social charges on companies.
The move, which Sarkozy first alluded to in a New Year's speech, is aimed at narrowing a competitiveness gap with Germany that is weighing on French growth, but it risks angering voters.
Among other measures, Sarkozy said he would set up an industrial investment bank in February with a billion euros in capital that will lend to small and medium-sized businesses struggling to obtain financing in today's climate.
He also said companies with more than 250 employees would be obliged to take on interns to the level of 5 percent of total staff, as a way of helping reduce chronic youth unemployment.
Sarkozy said he had a duty as president to hold off announcing his re-election bid until as late as possible.
Yet his interview, broadcast live across eight TV channels, seemed timed to respond to a series of TV appearances and speeches last week by Hollande, who is campaigning at full throttle for the two-round election on April 22 and May 6.
"We have to protect employment, we have to defend it, value it," said Sarkozy, who has thrown his focus onto growth and jobs since it became clear late last year that his deficit-cutting efforts could not save France from a credit rating downgrade.
"I am convinced this decision will save jobs and that it's the only credible way to stop outsourcing," he said of his so-called "Social VAT" plan to ease firms' social contributions.
Sarkozy, who turned 57 on Saturday, said a financial transaction tax he is planning for August would set a tax of 0.1 percent on transactions in French securities.
He gave no detail on the tax, which France wants to be adopted across the European Union, but a government source later said it would target shares, not bonds, and could raise a billion euros annually.
Separately, Sarkozy announced a rise in taxes on individuals' financial income such as interest and dividends.
UPS AND DOWNS
Sarkozy has worked hard in recent months to present a more austere and presidential demeanour following criticism of his informal and sometimes brash manner, and he stuck to a highly technical discourse on Sunday. He referred frequently to Germany as an economic model that France should be copying.
Setting the stage for what aides say will be an "honest" campaign that admits past mistakes yet seeks to show he is the safest pair of hands to steer France out of economic gloom, Sarkozy sounded a note of humility about his years in office.
"I accept the criticism," he said, adding that there had been "ups and downs" and things he regretted.
Opinion polls show Sarkozy could lose a runoff against Hollande by 10 percentage points, and some in his UMP party believe he is suffering from his decision to leave launching his campaign until close to a March 16 deadline.
Hollande put in an able performance last week in a TV debate against Alain Juppe, Sarkozy's foreign minister and one of the most talented politicians in his team, and he also unveiled a weighty and fiscally responsible economic plan.
In an attempt at one-upmanship, Sarkozy said France's public deficit for 2011 could come in as low as 5.4 or 5.3 percent of gross domestic product, well below a target of 5.7 percent.
Yet illustrating the economic challenge ahead, the source said that the government will soon revise down its 1.0 percent forecast for 2012 growth.