Brussels tries to bribe U.K. to adopt the Financial Transaction Tax
Brussels offers UK €7.7bn to adopt controversial bank tax
The European Commission has tried to entice David Cameron into adopting the controversial financial transactions tax (FTT) by pledging to cut Britain’s contributions to Brussels by €7.7bn (£6.4bn).
By Louise Armitstead
9:41PM GMT 23 Mar 2012
In a move that has astounded British MEPs, Jose Manuel Barroso, president of the EC, announced that the levy could halve European Union members’ contributions.
Mr Barroso has proposed that countries keep a third of the proceeds of the levy themselves and give two-thirds of it to Brussels. Europe’s budget would become “self funding”, Mr Barroso said, and would cut national contributions by a total of €54bn.
European officials, who backed Mr Barroso’s proposal, believed the plans would be acceptable to Mr Cameron because Britain would be able to keep a third of the revenues for itself.
“Our proposals would reduce very substantially the member states’ gross national income (GNI) contribution to the Union’s budget,” said Mr Barroso. “Some preliminary estimates suggest the reduction of this national contribution to the budget could be half, 50pc of what it could be without these own resources.”
But the plans were lambasted for failing to acknowledge that the cost of the tax would be shouldered by the City of London, home to 80pc of Europe’s financial services industry. Richard Ashworth, leader of the UK’s Conservative MEPs, said: “Mr Barroso may be proud to say an FTT would halve the amount that member states have to pay into the EU – but it would be grossly unfair to shift a huge chunk of that cost to the financial institutions – mainly in the UK. In fact he wants to make the City of London the EU’s cash cow.”
Marta Andreasen, the EC’s former chief accountant and MEP for South East England, said the proposal was “totally unfair” and an “attack on the City.”
European leaders have repeatedly said they will consider adopting an FTT although they have so far failed to agree how. Mr Barroso’s proposals may be discussed by leaders but they will still be subject to political approval.
Mr Cameron has insisted he will block any attempt by Brussels to impose an FTT. The prime minister has argued the levy would drive business away from Europe – and the City in particular – unless it were adopted by all G20 countries.
France and Germany have argued strongly for the tax. Nicolas Sarkozy, the French president, has led a pact of nine EU countries that are willing to adopt the levy.
Separately, the chief executive of Moody’s has suggested that Mr Sarkozy and other leaders should start their own state-backed credit rating agencies.
In a paper titled ‘A Solution for the Credit Rating Agency Debate’, Ray McDaniel said countries that object to being downgraded by private firms “have both the expertise and credibility” to produce their own ratings.