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A similar auction in France saw French short-term borrowing costs - for its two and four-year bonds - also rise by about half a percentage point.
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Then the entire stability pact had to be scrapped, as Germany broke the 3% annual borrowing limit every year from 2002 to 2005.
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"When almost 30% of your GDP comes from the financial market business in the City of London, it is understandable that they are saying we want to impose a tax on this ourselves and not an additional one in Europe," Volker Kauder said.
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