Why an “imminent” Robin Hood tax is the latest nail in the EU’s coffin

Tim Focas
ATP Aegon Open Nottingham - Day One
Robin Hood was an infamous medieval thief and occasional archer. (Source: Getty)

It is easy to be sceptical when any European Commissioner comes out and says something is imminent – particularly when you consider the ponderous and remote nature of the various institutions that make up the EU.

But with Britain no longer having a say, last week’s comments from Commissioner Pierre Moscovici about a financial transaction tax being “within reach” seems more of reality, rather than another political football endlessly being kicked down the road.

More commonly referred to the Robin Hood Tax, the FTT would slap a 0.05 per cent tax on any stocks, currencies, bonds and derivatives traded.

Clearly, as a country accounting for over 30 per cent of European wholesale finance across Europe, the UK would also be hit. But this would pale into insignificance in comparison to the one EU member states face should this tax finally come to fruition.

Read More: EU financial transaction tax to be unveiled this year

By definition, the FTT only serves to hinder the very thing that the slowly deteriorating European protect is attempting to create – increased jobs, growth and prosperity for all.

On the contrary, this sort of tax would only serve to restrict the amount of trading done, and lead to an instant flow of business to non-EU countries. Europe would be seen as a last resort for businesses looking to raise capital.

From a UK perspective, far from being a hindrance, this tax could provide the perfect excuse to start developing new long-term links with other global markets post Brexit.

Once the dust has settled on the renegotiation, new relationships with countries operating a far less regressive approach to taxation will be key to ensuring future growth and prosperity.

And to those EU officials still hell-bent on punishing the financial sector over eight years on from the global crisis, restricting buying and selling across the capital markets has a negative impact on the broader economy. Increased transaction costs will shrink margins and unlimitedly hurt anyone with savings in a pension fund.

Read More: Corbyn: Future Labour government would back financial transaction tax

Seeing how certain EU politicians are currently dealing with the Eurozone sovereign-debt crisis, inflicting further damage on financial markets makes no sense.

And despite the current government having the backing of numerous European business leaders against the tax, one can’t help but think that in a post-Brexit world, Moscovici’s views hold more weight.

However, this does not change the fact that should the FTT finally be implemented, it will be Europe financially shooting itself in the foot, leaving the UK to adapt quickly and build new ties with other modern and progressive nations.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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