Tuesday, 27 September 2011

Robin Hood Tax

The European Commission led by France and Germany intend to unveil detailed plan for the introduction of a new Financial Transaction tax or a Robin Hood tax in Europe. This proposal is not supported by the UK, Sweden or the US because of fears that Financial institutions will move out of Europe unless the FTT is implemented globally. The Swedes sum up the argument against the FTT:
The Swedish finance minister, Anders Borg, explained this month the opposition of his country, which does not use the euro.

‘‘We have substantial experience in Sweden,’’ he said. ‘‘Basically, most of our derivative and bond trading went to London during the years we had a financial transaction tax, so if you don’t get a solution that is universal, it is very likely to be detrimental for European financial markets.’’

The arguments for such a tax are persuasive but will only succeed if the global financial centres agree to adopt it, but at least the Europeans are looking at other ways of reducing deficits without the need for such deep cuts. They should be applauded for their efforts.

We have previously blogged in favour of a Robin Hood tax here, here and here

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