MEPs support Europe-wide banks tax

Plans for a Europe-wide tax on banks has won overwhelmingly support from MEPs - and triggered a new attack on British Chancellor George Osborne for not taking part.

Eleven EU countries have now agreed to ahead with a tax on financial transactions between banks as a way of raising extra money to fund future bail-outs.

And today’s support in a 533-91 vote in the European Parliament now leaves only endorsement from EU finance ministers needed before the European Commission tables formal proposals.

The call for an EU Financial Transactions Tax (FTT) was suggested by Brussels as the Eurozone crisis deepened, partly to show that banks were sharing the bail-out burden alongside taxpayers.

But Britain has been leading opposition, insisting such a tax would have to apply globally to function fairly.

In June this year a bid to get a 27-nation EU agreement failed, with Mr Osborne defiant in the face of a deal to go ahead between an inner core of countries led by Germany and France. Some others shared Mr Osborne’s view that an FTT would only work if adopted by all global financial centres.

The British Chancellor insisted the tax could damage the City of London and hurt the wider European economy by encouraging the trade financial transactions to move to countries outside the EU.

“I would have thought we want to be attracting business rather than the other way around,” he said.

Today, the Robin Hood Tax Campaign welcomed MEPs’ support for the tax and issued a new challenge to Mr Osborne:

“At a time when the country is faced with welfare cuts and increased austerity, it is incomprehensible that George Osborne continues to put the City profits before public good and turns down the opportunity to raise billions in much-needed revenue”, commented Campaign spokesman David Hillman.

He said: “MEPs have sent a clear message that the banks must pay for the damage they have caused.

“The tax will raise at least 37 billion euro per year (£30 billion) for the countries involved whilst reining in the worst excesses of the financial sector.”

The 11 countries keen to apply the FTT account for 90% of Eurozone GDP and 66% of EU GDP. They are Germany, France, Italy, Spain, Belgium, Austria, Greece, Portugal, Slovakia, Slovenia, Estonia.

The Robin Hood Tax Campaign estimates that Germany alone will raise about €10bn a year by imposing the FTT on its banks.

The idea is to impose a small charge on transactions of currencies, bonds and shares traded at banks and financial institutions, and the European Commission has calculated the FTT could bring in €57bn if implemented in all EU countries.

European Commissioner for taxation Algirdas Semeta said: “I warmly welcome the European Parliament’s overwhelming backing today for enhanced cooperation (a group of at least nine member states going ahead without the rest) on the FTT.

“The 11 willing member states must be allowed to move ahead with the FTT, for the sake of fair taxation and a stronger single market.”

He went on: “I urge finance ministers to make this matter a top priority in the new year, and to give the green light needed.

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