The European Commission’s internal market and services commissioner Michel Barnier has insisted that a financial transaction tax (FTT) will not be forced on the UK, as French and German governments look to realign their existing proposal.
Speaking at an event held at the Guildhall in the City of London today, Barnier emphasised that he believed while a pan-European FTT was feasible, it “would not be imposed on the UK against its will”.
“[The FTT’s] nominal amount would be negligible,” added Barnier. “And it would be levied on the parties to the transaction, at their domicile.”
His comments come as French and German ministers are reportedly considering a levy on share trading as an alternative to the more pervasive FTT, a proposal similar to the UK’s existing stamp duty tax.
“If the British aren’t willing to get closer to the European model of a financial transaction tax, it would make sense to talk with the British and other European states about the British model,” Philipp Rösler, Germany’s economy minister and vice chancellor, is reported to have told local German newspapers.
According to the reports, any UK-like tax on share trading would only be a first step to a broader FTT.
Under current FTT proposals, a charge would be levied on all transactions of financial instruments, except spot FX, between financial institutions when at least one party was located in the European Union. The exchange of shares and bonds would be taxed at a rate of 0.1% and derivative contracts at a rate of 0.01%.
Barnier’s speech also took a conciliatory tone towards the UK’s involvement in future European policy debate, despite Prime Minister David Cameron’s veto of a new treaty designed to impose tighter fiscal integration among European member states.
“This is a sovereign decision. I obviously respect and accept it,” said Barnier. “And I want to be clear that despite this decision, I still believe the UK’s future is at the heart of Europe.”