This from French President Nicolas Sarkozy after his meeting with U.S. President Barack Obama on Thursday:
“I want to thank President Obama for his understanding on all matters, including that of a levy or a tax on financial transactions, where I think we found common ground, at least common analysis, mainly that the world of finance must contribute to solving the crisis that we are all facing today.”
It’s an intriguing statement.
One could say that the French and German push for a “Robin Hood” tax on trading has the tacit support of the White House. That would be huge. Most economists will tell you such a tax will work only if it’s adopted broadly by the world’s biggest financial centres because a patch-work application would give traders options to avoid the tax. Germany says Europe should proceed with a tax regardless, but with the U.S. on board, a transaction levy would be a lock.
However, it seems likely that something was lost in translation -- or that Mr. Sarkozy is grasping for some positive news at a time when the Greek crisis has blown up his G20 agenda. Heading into the G20 summit, there was no indication in Washington that Mr. Obama is keen on a financial transactions tax. Last week in New York, Bank of Canada Governor Mark Carney told a conference that the financial transactions tax had no hope because too few governments support it.
But who knows? Maybe the something has changed in the White House. Watch this space.