BRUSSELS (MNI) – An EU tax on financial transactions will not be
imposed on the UK against its will, Europe’s top finance official said
in London on Monday.

Speaking at the City of London’s Guildhall, EU Single Market
Commissioner, Michel Barnier, defended the European Commission’s
proposal for a tax on share, bond, derivative and foreign exchange
trading, but said the tax – strongly opposed by the City and the UK –
“won’t be imposed on the UK against its will”.

“It is right that financial sector- massively bailed out by
taxpayers – pays a fair contribution to help us face up to global
challenges,” said Barnier, adding that the nominal amount of the tax
would be “negligible.”

Barnier’s remarks come in contrast to comments from the EU’s tax
Commissioner Algirdas Semeta who was quoted in the Financial Times on
Monday as saying that Britain would end up paying an EU financial
transaction tax whether it liked it or not. Staying out of the agreement
would deprive the UK of the revenues raised by the tax, which could
greatly reduce its annual contribution to the EU budget, he said.

France and Germany are keen supporters of the proposed tax, seeing
it as a politically popular way to raise revenues from the financial
sector, but the UK and Sweden oppose the plan on concerns that, unless
internationally agreed, it would simply drive trading to other global
market centers.

In his speech Barnier said EU leaders were “right to reject the so
called ‘safeguards’ in financial services” that British Prime Minister
David Cameron fought for at a summit in December in return for
supporting tougher fiscal rules for EU members, a dispute which forced
the EU’s 26 other member to seek a separate treaty.

“These ‘safeguards’ would have reintroduced a dose of unanimity in
decision-making in the single market” which would ultimately undermine
the project, he said.

The Frenchman denied there was a “plot to undermine the City”,
which he described as “one of Europe’s key assets on the global stage”.

“The EU must not hinder the City’s energy. But I am sure it is in
the City’s interest and the wider British interest, to play the European
game,” he said.

–Brussels Newsroom; Tel: +442078627492; email:

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