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Barnier: FTT will not be forced on UK

Monday 23 January 2012 - by Andrew.Hickley@gfsnews.com


Influential European internal market commissioner Michel Barnier has assured the City of London that a much-loathed financial transaction will not be imposed on the UK against its will.

Speaking on Monday in London, Barnier admitted he considers implementation of an EU-wide FTT to be "feasible" and "just" to ensure that the financial sector repays a fair contribution following the financial crisis.

Barnier confirmed that despite his support for the levy, he will not look to push the tax on the UK.

"Its nominal amount would be negligible. And it would be levied on the parties to the transaction, at their domicile," Barnier said, speaking in London.

"Regardless of whether the transaction is carried out in London, Paris, Frankfurt, Amsterdam or anywhere else. No discrimination.

"But at the end of the day, the FTT won't be imposed on the UK against its will."


UK MEP Kay Swinburne has suggested that the commission has been looking to force the FTT through as a form of value added tax, which could be imposed without needing the UK's consent.

The UK has been the fiercest critic of the Tobin tax plan put forward by the commission last year. Under the draft proposals, a 0.1 per cent tax would be imposed on equity and bond transactions, along with a 0.01 levy hitting derivatives trades.

Barnier also said that his high-level group considering reforms to the structure of banks in the EU could be seen as a "tribute" to the influence of UK's Independent Commission on Banking.

The government-appointed ICB proposed that UK banks should ring-fence their investment and retail arms to ensure a sufficient divide between risks.

The commission has previously declared its interest in seeing whether the ring-fence concept or the US Volcker Rule could be applied across the EU.

"But - and this is an important but - do not assume that the conclusion of this thinking means reproducing the UK approach to the EU as a whole," he continued.

"I have a very open mind. No one should prejudge the outcome of the group's work."



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