Bloomberg News

Cameron Urges Hollande to Back Eurobonds, Rejects Tobin Tax

May 18, 2012

U.K. Prime Minister David Cameron used his first meeting with new French President Francois Hollande to urge him to back euro region-wide bonds and to warn that he’ll veto any attempt to introduce a European Union financial transactions tax.

The two leaders met at the British Embassy in Washington, ahead of the Group of Eight summit at Camp David. For Hollande, who is arguing for more taxes on people and companies, and Cameron, two years into an austerity package, it was a chance to find common ground.

Before the meeting, Cameron said proposals for a EU financial transaction tax were a bad idea. British officials have argued that the so-called “Tobin Tax” would drive finance houses away from London.

“I’m very clear, we are not going to get growth in Europe or Britain by introducing a new tax that would actually hit people as well as financial institutions,” Cameron told reporters. “I don’t think it is a sensible measure. I will not support it.”

Afterward, he played down differences with Hollande, particularly in dealing with the debt crisis. He reiterated their joint commitment to shrinking deficits while promoting growth.

“We both want to see stability international markets, we both want to see countries deal with their deficits and we both want to see economic growth,” Cameron said.

The two men also may be closer on proposals for issuing public debt at a euro region level. Hollande during his campaign proposed “project bonds” to raise money for public works. Cameron in a speech yesterday endorsed that sort of “monetary activism.”

German Chancellor Angela Merkel, who’ll see both Cameron and Hollande later at Camp David, opposes euro bonds.

To contact the reporters on this story: Robert Hutton in Chicago at rhutton1@bloomberg.net; Helene Fouquet in Washington at hfouquet1@bloomberg.net

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


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