Cameron warns French president against tax on financial deals

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David Cameron has issued a blunt warning to French President Francois Hollande that Britain would not accept a Europe-wide financial transaction tax, insisting it was not “a sensible measure”.

Speaking in Washington last night ahead of the Group of Eight summit and their first meeting since Mr Hollande’s election earlier this month, the Prime Minister said the eurozone leaders needed to take “decisive action” to resolve the crisis over Greece.

Mr Cameron said he was looking forward to their meeting at the British ambassador’s residence, adding they were both agreed on the need to promote growth and tackle their deficits.

However, he also made clear his opposition to Mr Hollande’s demands for an European Union tax on financial transactions which was a key plank of his election campaign.

“We are not going to get growth in Europe or in Britain by introducing a new tax that would actually hit people as well as institutions,” he said. “I do not think it is a sensible measure.”

The two leaders were in the United States capital for the G8 summit at the presidential retreat at Camp David.

Amid mounting fears that Greece could fall out of the single currency, triggering a deeper financial crisis, Mr Cameron said the time had come for leaders of the eurozone nations to act.

“Decisive action is needed by the eurozone. They cannot go on kicking the can down the road. This is in Britain’s interest too because we want to have a successful growing eurozone on our doorstep and not the instability we have now.”

With the uncertainty caused by failure of the elections in Greece to deliver a clear result, Mr Cameron said the Greek people had to come to a decision. “The Greeks have to make up their mind which direction they want to go in.”