21.03.2012
By Simon Miller
A euro-wide financial transaction tax is unlikely to happen according to UK Treasury officials.
With the UK and Sweden opposing the FTT, German and French officials have been forced to lobby the euro-using EU17 group but Treasury official told Financial Risks Today that the proposed tax on derivative trades will not get a consensus in the EU17 group let alone across the whole 27 country European Union.
"We are sceptical that there will be agreement between the EU17 because they are taking different positions on this," according to the official.
The warning follows an optimistic speech by European commissioner for taxation, customs union, anti-fraud, audit and statistics Algirdas Šemeta in Copenhagen on Monday when he said it appeared that negotiations were "moving in the direction of political compromise in order to achieve consensus amongst all 27 Member States".
He continued: "This compromise should be founded upon the solid technical discussions on the Commission's proposal, which are already well underway."
However, the Treasury official said that this was the commissioner "playing politics" and added: "He is talking about a consensus that is not happening, this is not the reality of the situation."
The official's comments were echoed by German finance minister Wolfgang Schäuble who told a meeting of conservative legislators that "the probability of imposing an EU-wide financial-transaction tax is very slim," according to reports. He added that introducing the FTT in the eurozone alone "would be no easier".
Šemeta dismissed suggestions that there should be a move to proceed without the full 27-group.
"I say that the time is not ripe for such a move: we must maintain the active engagement of all Member States that we have seen up to now," said the commissioner.
Šemeta added: "One thing is absolutely clear: Member States must reach a decision on the FTT, and we must do so quickly. This is what citizens expect. It is what markets are looking for. And it is what many Member States have called for."
A UK Treasury spokesman told Financial Risks Today: "The UK's position remains unchanged. We do not believe that a European-only FTT is good for Europe or the UK and are prepared to exercise our veto on this matter."
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