European Commission draws up legislation for EU Tobin tax
THE European Commission (EC) is pressing ahead with plans to impose a Tobin tax on all financial transactions that pass through the EU, despite concerns that it would devastate the City.
EC president Jose Manuel Barroso said yesterday that the 0.05 per cent tax on “every type of financial transaction” would “create appropriate disincentives for overly risky or purely speculative transactions” and would also “address concerns about excessive profits” in the financial sector.
He promised to present legislation to implement the tax, from which the EU hopes to raise €200bn (£177.5bn) for additional spending, at this week’s European Council meeting of the region’s leaders.
Sovereign states will have a veto over the tax, but in practice it will be difficult for the UK to veto the whole raft of proposals the EC is hoping to push through, which include measures to cede control over asylum policy, giving the EU the right to approve the UK budget and kicking off a timetable for Croatia’s admission to the EU.
UKIP said that the tax was being proposed alongside a “tsunami of legislation”. The party’s leader, Nigel Farage, warned: “David Cameron had better have his wits about him.”