The 11 countries seeking to introduce a financial fransaction tax are looking for a way to drop the proposal, according to Economic and Monetary Affairs Committee chair Sharon Bowles.
In September 2011, the European Commission published proposals for an EU-wide FTT. Within a year it became clear that the unanimity among member states required to introduce the tax was not there. 11 member states are now looking to introduce the levy under a European procedure called enhanced cooperation.
But speaking at a conference held by The Economist in London this week, Bowles said: “They are having difficulty figuring out what to do. The more they look at it the more they are discovering it is a bad idea. That is the truth of it and they are trying to find a face-saving way of [dropping] it.”
Last month, the European Court of Justice rejected a UK legal challenge against the FTT being introduced through enhanced cooperation because it was too soon in the process to rule it out. Last week Bowles told Money Marketing that the decision was “entirely predictable”.
Speaking at the conference, Bowles said the UK has allies in its fight against the tax.
She said: “One of the biggest allies is the European Central Bank. I have been sat next to ECB governor Jean-Claude Trichet when he has been telling European finance ministers the FTT is a bad thing. So has David Lipton from the International Monetary Fund, so has former US Treasury Secretary Tim Geithner and so have I.”