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Transaction Tax Doesn’t Cheer Euro Markets

From a non dot connecting New York Times:

Pledge for Euro Unity May Not Be Enough to Satisfy Markets

By STEVEN ERLANGER and JACK EWING
August 16, 2011

PARIS — The leaders of France and Germany on Tuesday promised to take concrete steps toward a closer political and economic union of the 17 countries that use the euro, but it was unclear whether their proposals would be sufficient, or come quickly enough, to satisfy markets anxious over Europe’s debts and listless economies.

Reflecting the uncertainty, European stock markets opened lower on Wednesday after Asian traders offered a mixed reaction, with indices in Britain, France and Germany following the same downward trend as those in Japan, mainland China and Taiwan. The response seemed to show that the two leaders’ announcement had not initially restored confidence sufficiently to ease market jitters.

Why wouldn’t the world financial markets jump for joy at the announcement of a new tax on all financial transactions? (See below.)

President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany called for each nation in the euro zone to enshrine a “golden rule” into their national constitutions to work toward balanced budgets and debt reduction, a level of discipline well beyond the current, oft-broken commitment.

Note how The Times put this first, in order to suggest that the markets were rejecting this excellent – indeed, stunning – idea. An idea, which our President and other Democrats and media masters consider crazy at best.

They also pledged to push for a new tax on financial transactions, and for regular summit meetings of the zone’s members under the leadership of Herman Van Rompuy, who heads the council of all 27 European nations

And anyone is wondering why the markets opened lower? (By the way, this is something many Democrats have been pushing for in our own country.)

The joint French-German proposals were as modest as German officials had forecast. And the most ambitious idea — that all euro zone states legally bind themselves to working toward balanced budgets and reduced sovereign debt — is unlikely to be accepted by all member states. It may not even get through the French constitutional process, since Mr. Sarkozy does not have a constitutional majority in Parliament…

Which could be another reason why the markets are not as happy as they might be. Still, just think about it. The top leaders in Europe are pushing for the adoption of balanced budget amendments. In socialist Europe.

While our political leaders back here at home mock such talk as ‘hostage-taking’ and ‘terrorism.’

Meanwhile, a more recent report from Reuters, doesn’t even bother to mention the balance budget amendments proposal. Apparently, it’s not newsworthy.

World stocks dip on euro zone disappointment

By Natsuko Waki [sic] | Reuters
August 17, 2011

LONDON (Reuters) – World stocks ticked lower while top-rated government bonds rallied on Wednesday as investors grew concerned that French and German plans for closer fiscal integration may be insufficient to stop the regional debt crisis from spreading further…

France and Germany unveiled far-reaching plans for closer euro zone integration on Tuesday but stopped short of increasing the size of the region’s rescue fund and rejected for now the idea of a common euro bond…

European stocks fell half a percent while emerging stocks were steady.

Buried down in the article:

Investors were particularly unimpressed by a plan to tax financial transactions

"European leaders fail to provide a proper answer to the right question," Natixis said in a note to clients. "The efficiency of such a tax is clearly not proved."

Oh, come on. Everybody know that new taxes are almost as stimulating for economies as unemployment benefits and food stamps.

This article was posted by Steve on Wednesday, August 17th, 2011. Comments are currently closed.

4 Responses to “Transaction Tax Doesn’t Cheer Euro Markets”

  1. Howard Roark says:

    President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany called for each nation in the euro zone to enshrine a “golden rule” into their national constitutions to work toward balanced budgets and debt reduction, a level of discipline well beyond the current, oft-broken commitment.

    I didn’t know we had a Tea Party chapter in the EU!

  2. proreason says:

    Europe needs more unemployment payments. That’s what really stimulates an economy. All those people buying ipads with your kids money. It’s kinda like Jolt Cola.

    • untrainable says:

      No Pro, what really stimulates an economy is food stamps. For every dollar of food stamps, $153.26 is added to the economy. Which in turn creates jobs. Look how great things are in Detroit! [sarc off]

  3. sticks says:

    What these people need is more Obamanomics, when the market is going down the toilet what it needs is less cash to operate on, so tax them more and if that doesn’t work then spend more money you don’t have and tax them more. That should do it.


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