UK's Cameron vows to block EU-wide financial tax

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UK's Cameron vows to block EU-wide financial tax

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Britain is once again on a collision course with its EU partners France and Germany.

This time it is the prospect of a European-wide financial transaction tax that has got London threatening its veto.

UK Prime Minister David Cameron says such a levy, if only applied in Europe and not in the rest of the world, would be deeply damaging.

“The idea of a new European tax, when you are not going to have that tax put in place in other places, I don’t think is sensible and so I will block it,” he said.

Britain fears an EU-wide levy would cost jobs and damage the City of London, a global financial hub where much of the tax would be raised.

By contrast, President Nicolas Sarkozy wants France to introduce it unilaterally without waiting for fellow member states to get on board.

“When you buy an apartment in any country in the world you pay a tax, when you go to the supermarket to buy food, you pay a tax,” he told reporters on Friday. “And when you make a financial transaction, you don’t pay tax. Who can understand such a rule?”

Berlin insists the tax should be applied on a European level, meaning there will be plenty to talk about when Chancellor Angela Merkel meets President Sarkozy on Monday.

Their drive for EU-wide treaty changes to save the euro currency faced a UK veto last month. Europe minus Britain pressed ahead with a separate accord regardless.