Estonia pulls out of European Union's controversial financial-transaction tax as Chancellor George Osborne voices opposition

Jessica Morris
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The EU wants to curb speculative trading and unify various levies (Source: Getty)

Estonia has refused to sign an agreement which would pave the way for the European Union's controversial financial transactions tax (FTT), as chancellor George Osborne continued to voice Britain's opposition to the legislation which some fear would hit the international competitiveness of the City.

It comes as 10 EU finance ministers agreed the foundations of the so-called "Robin Hood tax" yesterday, and the exact details are expected to be finalised next year.

Estonia opposes the levy as it worries most of the shares traded by its financial institutions are issued outside the participating group, meaning it would be left with hardly any revenue.

Osborne also voiced his opposition: "We can challenge this financial tax in the European court if this implicates other states including the United Kingdom."

The original proposal from the European Commission back in 2011 envisaged a tax on all intra-day, share, bond and derivatives trades.

FTT aims to recover some of the public money used to support banks during the economic crisis, curb speculative trading and unify various levies already charged in several EU countries.

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