THE PAIN OF S and M....

Well it might not be anything new to have the combined Franco German axis ganging up on the rest of Europe.   It`s been tried before, of course, usually ending in failure, so this time a new strategy is emerging.   Having failed miserably through other means, it`s now the turn of economics to provide the charmless Sarkosy and Merkel with the chance of Europe wide domination.

Now in one sense, it`s the case that we in the good ol` U of K might be mere bystanders as we are, thanks heavens, not in the ill fated Eurozone.   But anything that goes on there does have an effect on our own economy, so maybe we should take careful note of what this dynamic duo are proposing to help solve the Eurozone crisis.

One of their solutions to the ongoing problem of bailing out basket case economies such as Greece, Ireland, Portugal and the rest is to propose a `transaction tax` on, well, transactions.   These are stock market trades and foreign exchange and would levy a tax of 1% on each transaction.   Doesn`t sound much and if it`s confined to countries in the Eurozone, why should we care?

But here`s the thing.   Gallic dwarf Sarkozy and Rosa Klebb lookalike Merkel have included this plan as part of a deal to set up a new `true European economic government` for the Eurozone and are now going further by demanding that the tax is applied to the whole of the European Union.   At which point, the good ol` U of K gets hammered, especially as London accounts for 70% of the financial services industry in the whole of Europe.   

Now I carry no torches whatsoever for the UK banking/financial services industry which seems to carry on regardless but I do baulk at the prospect of a tax which could amount to £13billion a year going from the UK to Europe to bail out the aforementioned basket cases.   At which point, the S and M plan is shown for what it really is - yet another opportunistic attempt to put another brick in the construction of the European SuperState they not only dream of but also dream of controlling.

I see that `financial experts` are questioning the feasibility of the tax plan which would have to be introduced not just Euro-wide but also worldwide otherwise the banks and dealers would up sticks from London and base themselves elsewhere where the tax did not apply.   But it`s not just a financial issue, it`s more of a political one - just the kind of thing Britain`s veto was designed for.   It`s not only this space that needs to be watched.   It`s also the UK Government`s reaction to this latest disciplinary S and M caper.   Time they were whipped into line.