In a move certain to upset UK prime minister David Cameron as well as increase the odds of the UK kissing the EU goodbye, Berlin to Push for Financial Transactions Tax to Cover All of EU.
German Finance Minister Wolfgang Schäuble will push for a planned European tax on stock and bond trading to apply in all EU countries in spite of firm UK opposition to the scheme and warnings from banks it would hurt their business.
While only 11 nations — including Germany and France — are planning to participate in the financial transactions tax, Mr Schäuble said on Saturday that this should be seen only as a first stage, and that efforts should then be made to convince other nations to join.
“We made important if not decisive progress,” said Pierre Moscovici, the EU’s economics commissioner, who is a staunch supporter of the initiative. “This deal is possible, and more than possible, if we go on working with ambition.”
The upbeat mood marked a shift from even a few months ago when the initiative seemed to be virtually dead.
Mr Schäuble told reporters after the meeting that having a tax across only 11 of the EU’s 28 countries sat awkwardly with plans under development in Brussels to better integrate capital markets across the entire bloc.
Will Cameron Face Reality?
Cameron keeps stating he can get EU treaty changes in regards to immigration, agricultural subsidies, and the financial transaction tax.
If he believes what he says, he is out of his freaking mind. No one can control the beast the EU has become. That’s the reality.
Perhaps this will change his mind, but most likely not. Stubborn arrogant politicians and common sense seldom mix.
Bring It On
As for the tax itself, it would likely reduce liquidity at a very inopportune time, given hugely overvalued market with high frequency trading accounting for most of the transaction volume.
But hey, bring it on, the higher the tax the better. The market needs a good crash to have decent values. And the UK certainly does not need the EU.
Mike “Mish” Shedlock