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Move to hike air fare hits air pocket

London, June 11 (Reuters): The Group of Eight industrialised nations have decided to consider imposing a levy on airline tickets to finance extra aid for Africa, a proposal which has run into opposition in Europe and the United States.

French President Jacques Chirac originally floated the idea, telling the World Economic Forum in January that a tax of $1 per airline ticket could raise $10 billion a year to fund bigger campaigns against AIDs and other diseases in Africa. But, the proposal met with stiff opposition with the European Union and the US.

After a meeting of G-8 finance ministers in London on Saturday that agreed to write off poor country debts, German finance minister Hans Eichel said the group was now working on using income from airline traffic to help aid.

“The air ticket tax. This is now on the working programme of the G-8. No one in the Group of Eight has said anything against it. It’s now on the agenda,” Eichel said.

British finance minister Gordon Brown said the G-8 was happy to work with the French and German governments who were looking at how the airfare contribution would finance aid.

A proposed voluntary airline tax on flight tickets sold in the European Union to help fund extra aid for Africa had faced opposition within Europe.

The United States also opposed the idea and the US Treasury Secretary John Snow made clear that Washington’s position had not changed.

However, Snow said that if other countries wanted to go ahead and look at proposals to fund aid via this mechanism the United States was not going to object.

French finance minister Thierry Breton said the idea for the tax, which had been pushed by France and Germany, would lead quickly to a pilot project.

“Our objective is to start as quickly as possible,” he said, adding that it was now up to the European Commission to present the technical analysis EU finance ministers had requested on the subject.

Even though finance ministers agreed in May that the levy would only be optional, it drew criticism from Austria, the Netherlands and holiday destinations such as Italy and Greece. Only a handful of countries said they would definitely implement it.

EU finance ministers have asked the union executive to prepare a study on a voluntary levy. The request was made even though the Commission took the rare step last week of refusing to make a proposal to member states because a majority of commissioners did not agree with the idea.

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