Tax differences between member states mean it will be very difficult to achieve a single retail financial services market in Europe, says FSA chairman Callum McCarthy.McCarthy told the Treasury select committee last week that having to integrate each individual state’s tax regime will be a huge obstacle to overcome and may never happen. He said it would be easier to integrate the wholesale side but questions remain for retail and the task has been vastly underestimated. McCarthy pointed out that a cost-benefit analysis, which the FSA routinely conducts, did not take place when the EU was drafting the Markets in Financial Instruments directive. The comments follow attacks on Mifid from McCarthy and FSA chairman John Tiner in recent months over timing and costs. When asked by MPs whether the costs of Mifid outweigh the benefits, McCarthy said it was too early to tell as the full details of the directive have not been defined. McCarthy’s comments come a week after the European Commission said that 10 EU states have yet to enforce the insurance mediation directive.