Sarkozy renews call for tax to fund aid

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France's President Nicolas Sarkozy on Thursday renewed a call for a tax on financial transactions to help fund aid for development.

He also called on a leading group of nations to step up and be an example on the issue.

"In Copenhagen, large countries decided to transfer some $120 billion a year from 2020 to the poorest countries.

"As all our budgets are in deficit, there is no one who can imagine that this money would come from national budgets, so we have no choice," he told the annual gathering of the World Economic Forum in Davos.

"Innovative financing is needed, it is not a choice, it is inevitable," he added.

The French head of state added that such a tax, which has been rejected by several countries, is his preferred option at an "infinitessimally" low rate.

However, he added that he remained open to other forms of innovative financing.

"I propose creating a small group of leading countries to put in place this financing and to keep to our promises. I have no doubt that in a few years' time, other countries will follow," he said.

"If we do not do it, if we do not have the intelligence to anticipate, you will see that even the most reasonable people heading these poor countries would be swept away.

"At that point, that would be another story," he warned, pointing out that the "rise of terrorism which feeds on poverty" or "the rise of extremism which feeds on injustice" could be key risks.

The president, who is heading the rotating presidency of the G8 and G20 is expected to defend innovative financing again during the African Union summit in Addis Ababa on Sunday.

© 2011 AFP

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