European leaders clash over Robin Hood tax
German Chancellor Angela Merkel listens to British Prime Minister David Cameron before their meeting on November 18, 2011 at the chancellery in Berlin.
Steve Chiotakis: British Prime Minister David Cameron meets today with his German counterpart Angela Merkel in Berlin. And the two leaders are expected to clash over a proposed tax that could go into effect all over Europe -- a tax that would help countries deal with their debt.
Marketplace's Stephen Beard Explains.
Stephen Beard: Germany and France are both rooting for the so-called Robin Hood tax. This would take money from Europe's rich financial institutions and give it to Europe's poor, over-indebted governments. The proposal is to levy a charge on all financial transactions -- like the sale of shares, bonds and fancy derivatives. It's believed this could raise $70 billion a year.
But Britain -- with Europe's biggest finance industry -- is vehemently opposed, and with good reason, claims Philip Booth of the free market Institute of Economic Affairs.
Philip Booth: Financial transactions will just disappear to another part of the world. No money will be raised and an awful lot of the fiancial services industry will be substantially undermined.
He believes much of the business would flee to New York and other finacial centers. In his talks with the German leader today, the British prime minister will underline his opposition to the tax, pointing out that fiancial services account for 15 perecent of the U.K. economy.
In London I'm Stephen Beard for Marketplace.