Danes join Cameron in fight against financial transaction tax

Tim Wallace
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A FINANCIAL transactions tax will cost hundreds of thousands of jobs, Danish economy minister Margrethe Vestager said yesterday, while Denmark’s former foreign minister Lene Espersen described the tax as “bullshit.”

The Danes – who hold the EU’s rotating presidency – now match David Cameron’s rejection of the European Commission’s proposals. Vestager pointed to the EC’s own studies that showed the tax could cost the EU around 1.7 per cent of GDP.

However, the French government is so desperate to implement the tax that finance minister Francois Baroin claimed that the country will go ahead with the plan with or without other EU states’ involvement.

And the deputy of the leading German Christian Democratic party has insisted Angela Merkel will press ahead with the tax despite opposition from her coalition partners.

“It will happen – I doubt the Free Democrats’ opposition will last forever,” said Michael Meister.

Meanwhile, European Central Bank governing member Ewald Nowotny said he expects the EU to experience a “mild recession” in 2012.

“Growth will be zero if we are lucky,” he said.

Nowotny also said he believes Hungary’s bailout negotiations with the International Monetary Fund (IMF) will end with a “positive solution.”

At the same time Greece was nearing a deal with private bondholders to half their debt holdings – a precondition of the IMF’s agreement to give the country a second bailout.

But hedge funds, which have huge holdings of Greek paper, are believed to be standing in the way of the IMF’s planned bond haircuts.