French lower house of parliament backs bank tax

By Reuters Staff
October 23, 2009

PARIS, Oct 23 (Reuters) – France’s lower house of parliament on Friday approved a plan to impose a 10 percent tax on bank profits in 2010 despite opposition from the government.The National Assembly, adopted the opposition-proposed measure by 44 votes to 40.

However, a source in President Nicolas Sarkozy’s ruling UMP party said the government would ask for a new vote, claiming a technical problem because two UMP deputies had accidentally voted the wrong way.

There are 577 deputies in the lower house and President Nicolas Sarkozy’s centre-right UMP party has a comfortable majority but many were absent for the evening vote.

“It is normal that the state, having played the role of insurer of last resort during the banking crisis receives some compensation,” said Socialist deputy Didier Migaud, who proposed the amendment to the 2010 budget.

Economy Minister Christine Lagarde reiterated her opposition to the measure.

“Adding ten extra points to the tax on companies during 2010 for their 2009 results, is making banks pay for the past, it’s making the banks pay by saying they made mistakes,” she said.

France stepped in with liquidity to help its banks at the height of the financial crisis last year.

The National Assembly also adopted a budget amendment, proposed by the government, to make banks pay for the cost of extra supervision.

Lagarde said this would bring in 100 million euros a year to help the central bank, the Bank of France, pay for workers and equipment to undertake that supervision.

(Reporting by Emile Picy; Writing by Anna Willard; Editing by Kenneth Barry) ((Reuters Messaging: anna.willard.reuters.com@reuters.net; +33 1 49 49 5339; anna.willard@reuters.com)) Keywords: FRANCE BANKS/

Friday, 23 October 2009 15:01:45RTRS [nLN507472 ] {C}ENDS

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