Bloomberg News

U.K. Won’t ‘Get Away’ With Transaction Tax Refusal, Kauder Says

November 15, 2011

Nov. 15 (Bloomberg) -- Chancellor Angel Merkel won’t let the U.K. “get away” with its refusal to back a European financial-transaction tax, said Volker Kauder, the parliamentary leader of her Christian Democratic Union.

“I can understand that the British don’t want that when they generate almost 30 percent of their gross domestic product from financial-market business in the City of London,” Kauder said in a speech to a party congress today in Leipzig. “But Britain also carries responsibility for making Europe a success. Only being after their own benefit and refusing to contribute is not the message we’re letting the British get away with.”

Merkel’s policy puts her at odds with the U.K., where Chancellor of the Exchequer George Osborne criticized European Union plans for a financial transaction tax as “a bullet aimed at the heart of London” in an article in yesterday’s Evening Standard newspaper.

The European Commission has proposed a plan that it says would raise 57 billion euros ($79 billion) a year. While Germany, Austria and Belgium would support a levy that covers only the euro region, Italy, Luxembourg and Ireland may oppose the tax without other countries participating. The commission proposal needs approval from all 27 European Union members.

EU governments are increasingly backing Germany’s views, Kauder said. While the leaders of France and other euro countries refused to even consider debt brakes in their constitutions when Merkel first pushed for it, French President Nicolas Sarkozy is now referring to it as the “golden rule” everyone in Europe has to live by, Kauder said.

“Now all of a sudden, Europe is speaking German,” Kauder said. “Not as a language, but in its acceptance of the instruments for which Angela Merkel has fought so hard, and with success in the end.”

--Editors: James Hertling, Eddie Buckle

To contact the reporter on this story: Rainer Buergin in Berlin at rbuergin1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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