Britain to be spared EU bank tax: European leaders push ahead with plans but drop demands for all nations to be included
By Tim Shipman
PUBLISHED: 01:05, 23 June 2012 | UPDATED: 12:29, 23 June 2012
Britain will be spared a swingeing new tax on City transactions as European leaders confirmed they will press ahead with plans for a single currency superstate.
Eurozone leaders vowed to plough on with the Robin Hood tax plans alone yesterday as they declared that a Brussels summit next week will be a ‘defining moment’ in EU history.
Nine countries yesterday vowed to impose new taxes on financial deals – which Britain thinks will cripple economic growth – but demands for all 27 EU nations to be included were dropped.
In a sign that next week’s summit will usher in new measures to set up a eurozone superstate, Germany, France, Italy and Spain all agreed it will lead to a ‘clear medium and long-term vision for greater integration’.
German Chancellor Angela Merkel told the meeting in Rome: ‘The lesson from the crisis is not less Europe but more Europe.’ Spanish PM Mariana Rajoy said the leaders had agreed on the need for ‘a political, banking and fiscal union’.
Italian prime minister Mario Monti warned that leaders may have just one week to save the euro with Spanish banks teetering on the brink of collapse.
Chancellor George Osborne attended a separate summit to discuss the the financial transactions tax
He declared that a rescue package was ‘absolutely necessary’ and pledged that concrete measures would be forthcoming next week. ‘We expect the conclusions of the EU summit to be more solid and credible compared with previous summits as far as growth is concerned,’ Mr Monti said.
The Italian premier said that meeting should ‘put at ease the financial markets expectations’, before delivering a pointed message in English: ‘The euro is here to stay and we all mean it.’
Yesterday Germany, France, Italy and Spain drew up plans for eurozone countries to invest £100billion – 1 per cent of their GDP in infrastructure projects to boost growth. But it quickly emerged that the pledge was not backed up by new hard cash.
George Osborne attended a separate summit of EU finance ministers in Luxembourg where nine countries agreed to press ahead with the financial transactions tax.
A Treasury spokesman said: ‘A lot of eurozone countries want to go on their own. That’s up to them but we think it would be damaging.’
Mrs Merkel said: ‘We can imagine introducing a financial transaction tax in our countries’, while French president Francois Hollande confirmed he wanted to introduce the tax ‘as quickly as possible’.
Mrs Merkel continued to resist calls for the eurozone bailout fund to invest money directly in Spanish banks, which many think would resolve the immediate threat.
Asked why Germany would not act to help, she said: ‘There can be no responsibility without control’ – a signal that Mrs Merkel wants effective control of European banks before agreeing to help them.
But the four leaders worked in secret on plans aimed to stop the spread of financial contagion while satisfying German demands that spendthrift countries are made to be more responsible before they get help.