EU financial tax ‘unlikely’
LONDON (Bloomberg) The European Commission’s proposed financial-transaction tax, which would impose a levy on stock, bond and derivative trading, is unlikely to be implemented, according to Credit Suisse analysts.“At this stage we are sceptical that a Europe-wide transaction tax will be implemented,” London-based analysts led by Carla Antunes-Silva wrote in a note to clients yesterday.
If the tax was agreed by all 27 members of the European Union, it would have a “very negative” impact on markets, particularly affecting investment banks, exchanges and high- frequency trading platforms, the analysts said.
The UK, whose agreement is needed for the tax to be implemented, says it will approve the EU measure when the rest of the world does likewise. European Commission President Jose Barroso proposed the tax yesterday, saying it could raise 57 billion euros ($77.7 billion) annually from 2014.
The idea would allow the financial industry to make “a fair contribution at a time of fiscal consolidation,” according to the commission, the EU’s executive arm. A transactions tax should be imposed irrespective of whether non-members agree, according to France and Germany.
The British Government “will continue to engage with its international partners on financial-transaction taxes and has no objection to them in principle”, the Treasury said in a statement yesterday. “But any financial transaction tax would have to apply globally and there are a number of practical issues that need to be worked through.”
UK Business Secretary Vince Cable told Bloomberg Television “we do not think taxation is a matter for the European Union, it’s a national responsibility; we set our own taxes and we’re going to stay with that.”