France goes after traders

Steve Dinneen
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FRANCE will mirror Alistair Darling’s banking windfall tax by clawing back half of traders’ bonuses next year.

Economy minister Christine Lagarde said she will single out frontline traders dealing in financial instruments for the 50 per cent tax on bonus payments. This differs from the UK tax, which affects all bankers.

It will kick in on bonuses above €27,500 – almost identical to the UK version – and will apply to all bonuses distributed in 2010.

French officials say Nicolas Sarkozy has been planning the move since August. The French state provided billions of euros in financial support to banks such as BNP Paribas, SocGen, Credit Agricole and Natixis during the height of the financial crisis.

The tax has been announced despite most French banks having paid back the majority of their loans.

Darling’s tax caused consternation in the City, with some fearing an exodus of talent, but appears to have been a hit with voters. Paris last night echoed the outrage felt in the City earlier this month, with France’s Banking Federation saying the move could disadvantage the city as a global financial centre. But a French economy ministry official told reporters: “This tax will encourage traders to be disciplined and reasonable.”