Fresh evidence of FTT damage

03-Apr-2013 @ 13:0

Kay Swinburne Kay Swinburne

Anthea McIntyre Anthea McIntyre

Anthea McIntyre Anthea McIntyre

New research on the potential impact of  the EU's planned Financial Transactions Tax is further evidence that the move is ill-conceived and will create unintended damage.

The study, commissioned by the Corporation of the City of London, demonstrates the potential of an FTT to cause collateral damage to the economy and to prospects of recovery, according to Kay Swinburne MEP, Conservative spokesman on finance and economic affairs in the European Parliament.

According to the report compiled by by London Economics and published today,  an FTT would lead to investors demanding an extra yield for purchasing Government bonds. That would add nearly £4 billion to the cost of issuing Government debt.  The expense will arise even though Britain has not signed up to the proposal.

Dr Swinburne said: "The full consequences of this meddlesome tax continue to be revealed. The EU authorities have consistently denied the true extent of the harm.  As I have said all along, this tax is not only bad for the City of London but also very bad indeed for Europe as a whole.

"As member states struggle to steer their economies towards recovery, this kind of extra pressure on the cost of borrowing is the last thing they need."

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