UK prime minister vows to block EU Tobin tax

UK prime minister David Cameron has vowed to veto a European-wide financial transaction tax unless it is imposed globally.

Speaking to the BBC yesterday, Cameron said the proposed Tobin tax would damage the City’s interests, and should either be imposed worldwide or not at all.

“The idea of a new European tax, when you are not going to have that tax put in place in other places, I don’t think is sensible and so I will block it,” Cameron told the BBC.

“Unless the rest of the world all agreed at the same time that we are all going to have some sort of tax then we are not going to go ahead with it.”

EU-wide tax measures need approval from all 27 member states.

However, on Friday French President Nicolas Sarkozy said he is pressing ahead with the proposals without the backing of all members.

“If the French themselves want to go ahead with a transaction tax in their own country, then they should be free to do so,” added Cameron.

Cameron’s plans to veto the Tobin tax has put the UK on collision course with its EU partners France and Germany, who are both championing the proposal.

The UK’s relationship with Europe was strained last month when Cameron vetoed a new EU treaty on greater fiscal integration in the eurozone.

The Tobin tax, suggested by Nobel Laureate economist James Tobin, was originally defined as a tax on all spot conversions of one currency into another. It is intended to put a penalty on short-term financial moves into another currency.


This article first appeared on Investment Week



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