Icap warns it could quit EU

City A.M. Reporter
BROKING giant Icap will quit the European Union if a financial transactions tax proposed by Germany and France takes effect across the bloc, the company’s chief executive said yesterday.

“Companies like Icap will simply move elsewhere outside the EU if Nicolas Sarkozy and Angela Merkel push ahead with this silly tax,” Icap chief executive Michael Spencer said.

The French and German leaders proposed the so-called Tobin tax last Tuesday, but Britain and the Netherlands have opposed such a measure, particularly if it does not apply globally.

Spencer, a former Conservative party treasurer, said that financial firms would relocate to New York and Singapore if such a tax came into being.

“This is another cynical threat by Sarkozy who knows this tax would overwhelmingly hit London as this is where trillions of dollars are traded each day,” he said. “It could only work if adopted globally.”

ICAP reported a 10 per cent rise in trading on its electronic platforms to $878bn (£533bn) in the second quarter of this year.

Shares in Icap shed 3.7 per cent on Wednesday, as the market digested news of the Tobin tax plans.