A European financial transactions tax, known as the 'Tobin tax' will not be forced on the UK, a senior EU figure has claimed.
Speaking at the City of London’s Guildhall, the EU Commissioner in charge of the internal market, Michel Barnier insisted it 'won’t be imposed on the UK against its will.'
Mr Barnier referred to the Square Mile as 'one of Europe’s key assets on the global stage', and he insisted there was no 'plot to undermine the City.'
'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' said Mr Barnier.
His criticism was reserved for the safeguards that were sought for the UK financial sector by the prime minister David Cameron last month at the EU summit.
He said they 'would spell the end of the single mark.'
As he defended the European Commission’s proposed tax on bond, share, derivative and foreign exchange trading, Mr Barnier said it was right that the financial sector pays its fair share.
The financial transactions tax, has varied opinions throughout Europe and provoked fierce debate.
France and Germany want to impose the financial transactions tax to raise money for bailouts of faltering Eurozone economies.
But both the UK and Sweden are against the tax, suggesting unless it was enforced around the world, it would just push trade to Hong Kong, New York and Zurich.
However his statement seem to be at odds with what the EU tax commissioner Algirdas Semeta, recently said in a media interview that about Britain having to pay an EU financial tax regardless of whether it wanted to or not.
According to Mr Semeta the UK would miss out on the revenues raised by the tax if it stayed out of the agreement.
That would be money which could significantly reduce its contribution to the EU budget.
At an an EU summit last month David Cameron used the UK’s veto of a 'fiscal compact' when he could not secure safeguards for the City of London.
At an an EU summit last month David Cameron used the UK¿s veto of a 'fiscal compact' when he could not secure safeguards for the City of London.
His action forced the EU’s other members to write a separate treaty.
On a separate issue, Mr Barnier said that the European Commission is examining limits on the gap between the pay of a bank’s top staff and its most junior employees.
He does not believe that the rules the EU has already introduced rules to control bank pay go far enough.
'If banks are incapable of self-discipline with regards to bonuses, then we must act,' said Barnier.
'Among the ideas that we are exploring is a ratio between fixed salary and bonus,' he said.
'Another idea which could be considered is a ratio between the lowest level of pay in a bank and the highest level of pay.'
Meanwhile, head of the IMF Christine Lagarde once again warned that Europe's stronger economies should do more to boost growth and beef up the defences against the debt crisis.
She suggested that some of the stronger economies in the eurozone could deal with their own debts in a less aggressive way and help facilitate economic growth.
Warning: Head of the IMF Christine Lagarde has once again warned that Europe's stronger economies should do more to boost growth and beef up the defences against the debt crisis
After meeting with German Chancellor Angela Merkel, Lagarde said:
'There are three imperatives - stronger growth, larger firewalls, and deeper integration.
‘Resorting to across-the-board, across-the continent, budgetary cuts will only add to recessionary pressures.'
She warned of the need to avoid a ‘1930s moment’ when the Europe was stuck by by ‘inaction, insularity and ridid ideology’
'Several countries have no choice but to tighten public finances, sharply and quickly,' she acknowledged.
'But this is not true everywhere. There is a large core where fiscal adjustment can be more gradual.'
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