Italy Backs Financial Tax

Italian Prime Minister Mario Monti on Wednesday threw his support behind a new tax on financial transactions, backing a push by Germany and France, but said he would prefer to have it apply across the whole European Union.

German Chancellor Angela Merkel and French President Nicolas Sarkozy have suggested such a tax among the 17-nation euro countries might be sufficient. But the Italian prime minister said he would rather have it applied across the full 27-nation EU — which would be more difficult because of British opposition.

“We are open to supporting this initiative at the EU level,” Mr. Monti said at a news conference with Mrs. Merkel during his first visit to Berlin since taking over from Silvio Berlusconi in November.

While the Berlusconi government had rejected a new financial levy outright, Mr. Monti has said he thought it was a good idea, particularly as a means of reducing the tax burden on families.

Mr. Sarkozy, who faces an election in April, has said France could even enact the tax unilaterally, but Germany has been more guarded.

Mrs. Merkel earlier this week, after meeting with Sarkozy in Berlin, said there’s no agreement yet on the tax inside her own governing coalition. She called for European leaders to clarify their stance on the matter by March.

The European Commission has estimated that the tax could raise as much as 57 billion euros ($77 billion) a year in Europe.

The tax would be a tiny percentage of the value of a trade — the French government proposed 0.1 percent on bonds and shares and 0.01 percent on more complex derivatives. Although some countries already have a minimal duty on share trading, the new proposal would not only increase the scope and size of the tax but also siphon off some revenue to Brussels.

There is no final decision yet, however, on what financial instruments would be taxed and whether currency trades — which make up a large slice of worldwide transactions — would be targeted as well.

Mr. Monti studied at Yale with the economist James Tobin, who first proposed the levy.

Mr. Monti’s meeting with Mrs. Merkel is the latest in a series of talks between European leaders. Following her talks Monday with Mr. Sarkozy, the German leader met in Berlin on Tuesday evening with International Monetary Fund chief Christine Lagarde. Ms. Lagarde was in Paris on Wednesday to speak with Mr. Sarkozy.

Mrs. Merkel and Mr. Sarkozy also plan to travel to Italy on Jan. 20 before a European summit at the end of the month.

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