British premier hits at ‘mad tax,’ attacking EU

DAVOS

British PM Cameron addresses 2012 participants at the World Economic Forum at a congress center in Davos, Switzerland. Cameron calls for a bilateral deal with Washington. AFP photo

Britain’s Prime Minister David Cameron launched a stinging attack on his European partners yesterday, slamming the eurozone as uncompetitive and calling a planned transaction tax “madness.”

The British premier took the stage on the second day of the World Economic Forum in Davos, the annual get-together for the global business elite, and revived his simmering feud with the ailing single-currency bloc. In a speech destined to delight his own eurosceptic party back home and infuriate France’s President Nicolas Sarkozy, Cameron scornfully dismissed French-led plans to introduce a tax on all financial trade, according to Agence France-Presse.

“Even to be considering this at a time when we are struggling to get our economies growing is quite simply madness,” he declared.

“In the U.K. we are doing exactly that through our bank levies and stamp duty on shares. And these are options which other countries can adopt. But look at the European Commission’s own original analysis,” he added.

“That showed a Financial Transactions Tax could reduce the GDP (gross domestic product) of the
EU by 200 billion euros, cost nearly 500,000 jobs and force as much as 90 percent of some markets away from the EU,” the prime minister said.

Cameron also called for a root-and-branch reform of how the eurozone is managed. “Now, I’m not one of those people who think that single currencies can never work,” he said. “But there are a number of features common to all successful currency unions.”

Single currency needs strong central bank

Cameron said a shared currency must be backed with a central bank ready to act as a lender of last resort, deep economic integration between member states and a system of fiscal transfers to offset imbalances.

In December, Sarkozy reportedly snapped that as Britain is not part of the single currency Cameron should shut up about its affairs.

Cameron also has backed the idea of a free trade deal between the EU and the U.S., claiming a trans-Atlantic pact could deliver a much-needed boost to global commerce.

His call for a bilateral deal with Washington followed similar comments by Germany’s Chancellor Angela Merkel on Jan. 25 and comes amid widespread admission among global leaders that the so-called Doha round of free trade talks was dead.“Let’s get free trade agreements with India, Canada and Singapore finalized by the end of the year,” the Associated Press quoted him as saying.