Cameron vows to block EU transaction tax

 

Britain will veto any attempt to introduce an EU-wide financial transaction tax, Prime Minister David Cameron said today.

He said France, Germany and other countries pushing for a levy were welcome to implement it within their own borders.

But imposing a tax across the EU without similar measures being in place elsewhere in the world would hit European jobs and prosperity, he said.

French finance minister Francois Baroin has suggested France could push ahead alone with a so-called "Tobin tax" amid UK hostility.

Mr Cameron told BBC1's Andrew Marr Show: "If the French themselves want to go ahead with a transactions tax in their own country then they should be free to do so.

"We actually have stamp duty on share transactions in Britain and yet we have one of the most competitive and successful financial services markets anywhere.

"But the idea of a new European tax when you are not going to have that tax put in place in other places and so I will block it unless the rest of the world all agreed at the same time that we were all going to have some sort of tax."

Former chancellor Alistair Darling, who ran the Treasury during the 2008 financial crisis, warned of an "unmitigated disaster" in Europe after European leaders had tied themselves into a "suicide pact".

He told the Sky News Murnaghan programme: "If the eurozone crisis is not resolved, the chances are we will get recession in Europe. If you get recession in Europe, the chances are we will follow because it is such a big market.

"I think the imperative at the moment is for eurozone leaders to finally face up to the fact we have to sort out this imbalance between the rich countries and the poorer countries on the periphery of Europe.

"If they don't do that I see nothing but unmitigated disaster.

"In 2008 we were dealing with a banking crisis which, although difficult, you can and we did deal with it.

"What we have now is doubt over the solvency of countries. It is much more wide spread.

"It does not have to be like this. If countries would act together with the same spirit as they acted in 2009 then in Europe, it would be painful, it would be slow, but at least we could begin to turn the corner and begin to get the economies growing again.

"If you don't get growth then you can't get borrowing and debt down. That's why I think the summit just before Christmas was a complete disaster because they came up with a solution that may have been appropriate a few years ago but is actually locking them into a suicide pact.

"It was a complete wasted opportunity back in December and I would like think eurozone leaders spent Christmas working on a plan that we will see shortly because it is a plan we do need to turn the corner.

"It's terribly important we are engaged in that process."

PA

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