France - Economy

One-off bank bonus tax to raise 360 million euros

Article published on the 2010-01-12 Latest update 2010-01-12 14:05 TU

British Prime Minister Gordon Brown (R) and French Finance Minister Christine Lagarde at the G20 session
(Credit: Reuters)

Finance minister Christine Lagarde says the government hopes to raise 360 million ueros from its one-off tax on bank bonuses. The 50 per cent tax will apply to 2,500 traders who have earned a bonus of more than 27,500 euros.

The French government last month approved a draft bill for the tax which will be included in new financial legislation due to go before parliament this month.

The measure was agreed between President Nicolas Sarkozy and British Prime Minister Gordon Brown at a meeting in Brussels last month as part of a drive to make banks more responsible.

In an interview with Le Figaro newspaper, Lagarde dismissed fears that the tax will force banks to leave France.  "Where will they go?" she asked. "To London?"  

Lagarde also said France would increase pressure on the US to also rein in bank bonuses at a group of 7 meeting in Canada in February.

The US administration has dragged its feet over introducing such measures targeting banks, but Lagarde said American public opinion supported them

Leading French bank BNP Paribas found itself the target of public outrage in August when it planned to pay more than one billion euros in bonuses to its staff.

Of the 360 million euros, 270 million is to be set aside to support the Guarantee Fund for Depositors to strengthen the security of account-holders.