The UK government is getting a little cheeky, challenging the EU’s proposal to implement a financial transactions tax across 11 EU states.
The UK has taken the issue to the EU’s most powerful court, the European Court of Justice, reports CNNMoney. They have asked the court, the G20 finance ministers and financial centers to reconsider the tax, and contemplate the potential risks the levy could have on the economy. The UK government strongly believes the proposal would negatively affect savings and pensions, and cause damage to the already wounded European job situation.
The proposal was driven by the UK government’s effort to compensate losses from bailout budgets and recession damages. In a desperate attempt to seek new sources for money, the government has been placing increased pressure on the banking industry to face the costs.
We’d love to be your preferred source for news.
Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!
These levies are called, “Tobin taxes” a term derived from James Tobin, the man who introduced taxing foreign exchange transactions in the 1970s in order to stop speculation.
Spain, Germany, Italy and France, which are also four of the strongest economies in the EU, are among the countries that have agreed to come on board for the transaction tax despite the rest of the EU failing to support the proposal. This is the first time that the EU has allowed a new tax without the agreement of all its members.
A UK Treasury spokesperson told CNNMoney, “While we will not participate in a Europe-only tax, we have also said we will not stand in the way of other countries, but only if the rights of countries not taking part are respected.”
The UK is not participating, maintaining that the taxes will increase their trading costs because of the EU banks with operations in London. The tax applies to buyer and seller transactions conducted in any of the participating countries. The increase in costs will affect businesses and individuals in the UK.
The Association for Financial Markets in Europe, who signed the G20 letter, has acknowledged the UK’s challenge to withdraw the taxes. How the European Court of Justice will proceed from here remains unknown, but until a decision is made the UK government and financial lobbyists will continue to make noise.
To read the full story at CNNMoney click here.
Add as Preferred Source
