Britain says financial transaction tax must be global

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Britain on Wednesday insisted that German and French plans for an EU-wide tax on financial transactions must be applied across the world to be effective.

The proposal by German Chancellor Angela Merkel and French President Nicolas Sarkozy followed talks between the pair in Paris on Tuesday aimed at restoring confidence in the debt-hit eurozone, to which Britain does not belong.

The Treasury said the British government would "engage" with other nations over the proposals.

However a spokesperson also insisted that "any financial transaction tax would have to apply globally -- otherwise the transactions covered would simply relocate to countries not applying the tax."

Industry body the British Banking Association agreed.

"We need to ensure that if a transaction tax is being actively considered by policymakers, it is being considered by policymakers around the world, otherwise the consequence could be distortion of the markets which ultimately loses business and impacts on economic growth," a BBA spokesman said.

© 2011 AFP

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