City leader: finance tax will hurt Europe

Tim Wallace
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THE FINANCIAL transaction tax (FTT) planned in 11 EU countries will harm investment and competitiveness across Europe, TheCityUK’s Chris Cummings warned at a dinner hosted by Societe General last night.

Cummings urged closer Anglo-French co-operation, beginning with a drive to improve European competitiveness and boost economic growth.

“Our two countries have a longstanding interconnected relationship and a shared history, but must work together to guarantee a globally competitive EU,” said Cummings. “This includes standing firm on issues which affect the whole of the EU, such as the negative impact of the proposed FTT. The tax will undermine the competitiveness of the whole EU, making the region less attractive for business and reducing trade and investment. “

The FTT will hit trades of bonds, shares and derivatives which include parties in the 11 countries or securities issued in them.

The stated aim is to make financiers pay for the financial crisis and to increase stability in markets by reducing volumes.

But in fact “The tax is likely to increase the cost of capital for governments, meaning they may be forced to increase taxation or reduce spending to lessen the shortfall,” said Cummings.