Brussels, 29 March 2012 – The financial industry has mounted a full scale scaremongering lobby to block the the European Commission's proposal for a financial transaction tax (FTT) at the EU level, according to a new report from Corporate Europe Observatory (CEO) published today 1, ahead of the EU finance ministers meeting in Copenhagen.
And the lobby strategy appears to have been successful given the comments by the German Finance Minister after the last EU Council meeting, saying that an FTT in the EU or the Eurozone was not possible.
CEO's report reveals how privileged access to political power, combined with a media campaign to scaremonger about the effects of the tax have helped stir opposition. Using manipulated data, the financial industry has exaggerated the economic impacts of the tax, and argued that the costs would force the industry to relocate offshore.s
"Banks, hedge funds and traders have pulled out all the stops to try and prevent the Robin Hood tax being introduced in Europe or the Eurozone. And their friends in government in the UK, Ireland and elsewhere seem to have killed off the idea. The Eurozone is divided and now France and Germany, who have expressed support for the idea, are scrabbling around in the sand trying to come up with a watered-down alternative."
Big companies, such as interdealer broker Icap and spread betting firm CMC Markets, have used their close links to the UK government to urge opposition, while international financial lobbying associations including the International Swaps and Derivatives Association and the Association of Fincancial Markets in Europe (AFME) have fiercely lobbied institutions in the EU, through letters, media statements and at informal meetings.
The report reveals how by manipulating figures, the lobby industry has painted a disaster scenario if such a tax were implemented, while ignoring the positive impact such a tax would have on financial stability.
With the proposals now to be decided by the EU Council - which requires unanimity on taxation issues - Europe's Financial Taxation Tax looks destined for the dustbin.
“This is a lost opportunity to make ae real change in order to curb speculation and regulate a dangerously deregulated financial sector which led the EU to the current crisis”
Ester Arauzo, Corporate Europe Observatory, email@example.com tel: +32 2893 0930 / + 32 488 080 704
- 1. Lobbying to Kill off Robin Hood, Corporate Europe Obsevatory, March 2012