Today, French President Nicolas Sarkozy renewed his call for a financial transaction tax, this time with agreement from Germany. Moreover, German Chancellor Angela Merkel and Sarkozy propose a common eurozone government.

The leaders of France and Germany are pushing all 17 nations that use the euro to enshrine balanced budgets in their constitutions and want greater collective governance of the eurozone.

French President Nicolas Sarkozy says he and German Chancellor Angela Merkel want a “true European economic government” that would consist of the heads of state and government of all eurozone nations.

The new body would meet twice a year and be led by EU President Herman Van Rompuy.

Sarkozy and Merkel presented their proposals after meeting Tuesday in Paris amid signs of economic slowdown and after an exceptionally turbulent week on financial markets prompted by concern about Europe’s financial health.

Stocks Fall as Europe Floats Financial Tax

Bloomberg reports Stocks Fall as Europe Floats Financial Tax

U.S. stocks fell, following the biggest three-day rally for the Standard & Poor’s 500 Index since 2009, as French President Nicolas Sarkozy said his nation and Germany will propose a financial transaction tax.

There are few details yet on the financial transaction tax, but it sounds like another scheme to bailout banks at the expense of others.

Is the US far behind? In regards to the balanced budget amendment, sadly so. The US needs one but Democrats and President Obama oppose the idea.

In regards to a financial transaction tax, don’t expect one here, for now.

Mike “Mish” Shedlock

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