Italy backs EU-wide transaction tax

ITALIAN prime minister Mario Monti has thrown his support behind a new tax on financial transactions, backing a push by Germany and France, but he wants it to include the UK.

German chancellor Angela Merkel and French president Nicolas Sarkozy have suggested a tax among the 17-nation euro countries might be enough. Mr Monti said he would rather have it applied across the full 27-nation European Union – which would be more difficult because of UK opposition – but did not rule out a eurozone-only deal.

The tax would be a tiny percentage of the value of a trade – the French government proposed 0.1 per cent on bonds and shares and 0.01 per cent on more complex derivatives.

Earlier this week, Prime Minister David Cameron insisted he would veto a European-wide financial transaction tax unless it was imposed globally, deepening the divisions between European heavyweights France and Germany.