German economic minister Philipp Roesler on Friday floated a European "bourse tax" as a compromise to a wide-ranging financial transactions tax (FTT) that would hit London harder than other European financial centres and make the City less attractive as a global business centre.
Chancellor Angela Merkel's spokesman called the idea "sensible". Speaking ahead of Monday's eurozone financial ministers summit, he said: "[Mr Roesler] is looking at all possibilities for getting the UK on board... We need to find out in talks whether a bourse tax could be a bridge for the UK, then Germany will discuss this with its European partners."
No details have emerged how such a scheme, which could fund economies reeling from the eurozone debt crisis, could work. pb]However, it might be similar to the 0.5pc stamp duty on share trades already in place in Britain, which is levied on the investor.[/b] A similar scheme could be introduced across all of Europe.
But the proposal is unlikely to win No 10's backing. Last month the Prime Minister blocked European legislation aimed at defusing the eurozone debt crisis after failing to win safeguards for the City.
Earlier this month, he said he would veto a European FTT unless it was imposed globally, widening the split with Brussels.
Think-tank Open Europe warned if an additional levy is imposed on the UK's current tax it is unlikely to win support. Raoul Ruparel, head of economic research, said: "If it is imposed only on shares this bourse tax may not have such a big impact but if it covers, say, derivatives, then it would have a disproportionate effect on the UK because of the size of the City.
"The FTT is never going to work in the UK and this doesn't seem on the surface that much different: a similar proposition but in another wrapper."
Andrew Tyrie, chairman of the Treasury Select Committee, said: "Most people agree the FTT is unworkable. The FTT or anything that amounts to one is, and almost certainly should be, a non-starter at European level: the effects would be incalculable and possibly deeply pernicious to the UK. Blindly targeting all financial transactions goes for the wrong target and will make us no safer but could make us poorer."
Syed Kamall, Conservative MEP for London, also dismissed the new levy. "Germany knows that a FTT will invite another UK veto so it's understandable they are floating alternative ideas," he said. "Whatever the merits or pitfalls of such a levy, all monies raised must go to national treasuries, not pay for EU pet projects."
The Treasury said while it had no objection in principle to a globally applied FTT, its position currently remained unchanged.
Elsewhere in the Europe, tension ratcheted up in Greece over the country striking a deal with private bondholders on how big a haircut they would take.
As talks ended without a resolution on Friday night, sources close to the negotiations said bondholders would suffer a real loss of 65pc to 70pc.
The new bonds would have a 30-year maturity, with a 10-year "grace period" and a "progressive" coupon that averaged out at 4pc.
Greek politicians and the country's creditors will start talks again on Saturday morning.
Greece is running out of time to reach an agreement by Monday's deadline so it can secure the next €14.5bn tranche of its €130bn rescue package. The impasse saw European markets slip, with the FTSE 100, CAC 40 and DAX all falling 0.2pc.
In Italy, the Cabinet approved laws to kickstart the economy by deregulating tightly controlled service sectors and professions.
Hungary's prime minister Viktor Orban gave up his plan to take control of the central bank, easing pressure from the EU.
Source: UK rejects German 'olive branch' of exchange tax - Telegraph
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Stamp Duty which is actually a transaction tax Cameron fights to hard makes good sense actually because it reduces number of fake short term transactions and encourages long term investment. It already exists but penalises the wrong people, say buying a house is something long term that should be encouraged and no need to charge stamp duty on such purchases, especially given that lots of banks get away with it - hence average share ownership now is measured in seconds rather than years.
Chancellor Angela Merkel's spokesman called the idea "sensible". Speaking ahead of Monday's eurozone financial ministers summit, he said: "[Mr Roesler] is looking at all possibilities for getting the UK on board... We need to find out in talks whether a bourse tax could be a bridge for the UK, then Germany will discuss this with its European partners."
No details have emerged how such a scheme, which could fund economies reeling from the eurozone debt crisis, could work. pb]However, it might be similar to the 0.5pc stamp duty on share trades already in place in Britain, which is levied on the investor.[/b] A similar scheme could be introduced across all of Europe.
But the proposal is unlikely to win No 10's backing. Last month the Prime Minister blocked European legislation aimed at defusing the eurozone debt crisis after failing to win safeguards for the City.
Earlier this month, he said he would veto a European FTT unless it was imposed globally, widening the split with Brussels.
Think-tank Open Europe warned if an additional levy is imposed on the UK's current tax it is unlikely to win support. Raoul Ruparel, head of economic research, said: "If it is imposed only on shares this bourse tax may not have such a big impact but if it covers, say, derivatives, then it would have a disproportionate effect on the UK because of the size of the City.
"The FTT is never going to work in the UK and this doesn't seem on the surface that much different: a similar proposition but in another wrapper."
Andrew Tyrie, chairman of the Treasury Select Committee, said: "Most people agree the FTT is unworkable. The FTT or anything that amounts to one is, and almost certainly should be, a non-starter at European level: the effects would be incalculable and possibly deeply pernicious to the UK. Blindly targeting all financial transactions goes for the wrong target and will make us no safer but could make us poorer."
Syed Kamall, Conservative MEP for London, also dismissed the new levy. "Germany knows that a FTT will invite another UK veto so it's understandable they are floating alternative ideas," he said. "Whatever the merits or pitfalls of such a levy, all monies raised must go to national treasuries, not pay for EU pet projects."
The Treasury said while it had no objection in principle to a globally applied FTT, its position currently remained unchanged.
Elsewhere in the Europe, tension ratcheted up in Greece over the country striking a deal with private bondholders on how big a haircut they would take.
As talks ended without a resolution on Friday night, sources close to the negotiations said bondholders would suffer a real loss of 65pc to 70pc.
The new bonds would have a 30-year maturity, with a 10-year "grace period" and a "progressive" coupon that averaged out at 4pc.
Greek politicians and the country's creditors will start talks again on Saturday morning.
Greece is running out of time to reach an agreement by Monday's deadline so it can secure the next €14.5bn tranche of its €130bn rescue package. The impasse saw European markets slip, with the FTSE 100, CAC 40 and DAX all falling 0.2pc.
In Italy, the Cabinet approved laws to kickstart the economy by deregulating tightly controlled service sectors and professions.
Hungary's prime minister Viktor Orban gave up his plan to take control of the central bank, easing pressure from the EU.
Source: UK rejects German 'olive branch' of exchange tax - Telegraph
---
Stamp Duty which is actually a transaction tax Cameron fights to hard makes good sense actually because it reduces number of fake short term transactions and encourages long term investment. It already exists but penalises the wrong people, say buying a house is something long term that should be encouraged and no need to charge stamp duty on such purchases, especially given that lots of banks get away with it - hence average share ownership now is measured in seconds rather than years.
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