The return of Speedy: Sarko goes FTT

This image shows Nicolas Sarkozy who is presid...

Suddenly, Nicholas Sarkozy is in a hurry. After a dozy performance in recent years, and facing defeat at the hands of socialist rival François Hollande in May’s presidential election, the man once nicknamed ‘Speedy’ is trying to recapture the hyperactivity of the early days of his political career.

In marked contrast to British electioneering strategy, Sarkozy’s efforts are concentrated on introducing new taxes. Fresh from ramming through the national assembly (the lower house of parliament) a very controversial and very risky hike in VAT – compensated for by cuts in some social security taxes – Sarkozy’s zeal has now lighted on the idea of the financial transactions tax (FTT) so dreaded by David Cameron. Known as the ‘Tobin Tax’, after the Nobel-prize winning American economist who came up with the idea in the early 70s, the measure enjoys widespread support in France, the home of Attac, the group at the forefront of the international campaign for a FTT. After years of dithering, Sarkozy now says he wants to introduce it within two months. And he says France will go it alone if Germany and other European countries don’t back his as-yet-unspecified proposals.

On Friday, Sarkozy said France ‘will not wait for all the others to agree’ before implementing the tax. ‘We will implement it because we believe in it. It’s unacceptable that financial transactions are the only transactions exempt from all tax.’

All this represents an abrupt virage à 180 degrés for Sarko, who has always insisted that only an international or Europe-wide Tobin Tax would work. As recently as late November, the socialist-controlled senate voted to introduce a FTT at the rate of 0.05%. Despite support from senators from Sarkozy’s UMP party, the government flatly refused to take up the initiative. ‘France can’t legislate alone, because that would be counter-productive,’ declared overseas trade minister Pierre Lellouche. ‘Because that would be harmful to the financial position of Paris.’ Sarkozy himself ruled out going it alone saying bluntly, ‘That’s not happening here.’

The about-face came in the president’s new year’s message on French TV. Suddenly, Sarkozy was speaking with the zeal of a convert. ‘The financial industry must participate in repairing the damage it has caused,’ he said. ‘For us, it’s a question of morality.’

The president’s opponents smell a rat. Many believe, that even if the measure is passed, it will never be implemented if Sarkozy is re-elected. This suspicion is fuelled by government’s refusal to say when the proposed tax would come into force. It has also so far refused to give any details about the tax rate or specify which transactions will be affected, although a ‘text’ is now being promised for early February.

English: Many on the Left have a particular di...

‘If he does it, I will support it,’ said Vincent Peillon, a member of François Hollande’s campaign team. ‘But we need to look at things the other way round and say: look’s it’s funny, Nicholas Sarkozy is now taking the position of Attac ten years ago.’

Economists doubt the feasibility of a exclusively French tax. Jacques Delpla, a member of the Council of Economic Analysis said France would ‘not so much be shooting itself in the foot as shooting itself squarely in the head’. Meanwhile, jittery French Bankers, are predictably warning that the tax would lead to an exodus of financial trading from Paris, chiefly in the direction of London. Even the Greens are sceptical, saying it would take ‘at least a year’ to implement the tax.

Sarkozy’s rush to embrace the jewel in the crown of antimondialisme has provoked something close to derision among rivals and in the French press. But no one ever lost money by over-estimating the stubbornness of Nicholas Sarkozy.