What now? EU

ILW

DVardysShadow wrote: »

Iron Wolf tells Brussels what to do.

If the Eurozone don't want their currency to be traded without a Tax, who the hell are you to tell them different? Remember, you want nothing to do with the Euro, so why should you be upset about a tax on Euro transactions?

London this, London that. Cameron never asked, but I bet that our former partners would have been well satisfied with a tax on Euro transactions alone.

An insistence that London could do Euro trades without a Transaction Tax would rightly be seen as us wanting to !!!! them over as you so eloquently put it.

Surely whoever owns currency of any particular denomination can trade it wherever they like. or are you saying the EU can stop it somehow?

lionelator

Has anyone heard of the Indian rupee? Fascinating stuff, basically its illegal to carry it and trade it out of the country, so you have to convert currency to and from the Indian rupee in India only, outside the country youre stuffed if youre trying to buy or sell rupees.
The Indians are probably sh!!ting themselves now after reading this thread as they clearly have no way of enforcing that sort of rule outside the country, do they? Oh wait, theyve been doing it for years.
But then thats really held the Indian economy back hasnt it? Oh wait no...
Hang on...

DVardysShadow

IronWolf wrote: »

And exactly how do you enforce a tax on a transaction completed in another sovereign nation pray tell? Either you have to force banks to trade euros only in the eurozone with eurozone banks, in which case the tax will fall on them, or you have to get the country to agree to handing over this tax to you, cant see that happening.

Exactly as highlighted. It won't be forced, it will be taxed. So anyone who contemplates a Euro trade within the Eurozone will pay the tax. And if they attempt to do it via London, where there is no tax, they will be taxed twice, once on the way out and once on the way back in.

To some degree I am speculating here, because I doubt the whole thing has been worked out. But you are the one who said that all Brussels wanted to do was f!!! us over. Actually, if we had compromised and accepted the tax on Euro transactions only, it would have put us on a very level playing field with the rest of the EU for Euro transactions. But now we have shown the bulldog spirit and really told them that we are not to be f!!!d over, the tax can now be applied to doubly f!!! us over.

Nice one Dave!

ILW wrote: »

Surely whoever owns currency of any particular denomination can trade it wherever they like. or are you saying the EU can stop it somehow?

I am not talking cash Euros here, I am talking shares bonds the like.

Following the answer to Iron Wolf, trades of Euro based securities outside to outside would obviously not be taxed and could not be stopped. Trades inside to inside or between outside and inside would be taxed once. This could be enforced easily because it will always pass through an EU bank.

CLAPTON

DVardysShadow wrote: »

When you think of the amount us housebuyers pay in stamp duty, the Financial Transaction Tax will be trivial at 0.1%, but enough to discourage excessive repackaging of products. I don't see this as closing in on itself so much as keeping things damped for the sake of stability. It might hamper growth a little - but obviously they are prepared to trade a little growth to retain stability.

this 'trivial' tax at 0.1% is calculated to raise 55 billion euros a year

who will pay this tax ; the financial instiitutions?

or just maybe they pass this on to consumers?

IronWolf

lionelator wrote: »

Has anyone heard of the Indian rupee? Fascinating stuff, basically its illegal to carry it and trade it out of the country, so you have to convert currency to and from the Indian rupee in India only, outside the country youre stuffed if youre trying to buy or sell rupees.
The Indians are probably sh!!ting themselves now after reading this thread as they clearly have no way of enforcing that sort of rule outside the country, do they? Oh wait, theyve been doing it for years.
But then thats really held the Indian economy back hasnt it? Oh wait no...
Hang on...

Firstly, it is not illegal to trade rupees outside of the country, it is only illegal to take them in/out of the country.

Secondly, this would never work with the Euro, because the eurozone is part of the wider EU who have treaties in place for free trade and it probably isn't legal to restrict the movement of their currency.

Thirdly, even IF it was possible, in that case the tax is born by the banks in the eurozone, and wont be passed on to the foreign banks who are larger and more powerful. In other words, this isn't going to "isolate" us.

DVardysShadow

CLAPTON wrote: »

this 'trivial' tax at 0.1% is calculated to raise 55 billion euros a year

who will pay this tax ; the financial instiitutions?

or just maybe they pass this on to consumers?

We are not party to it, so why the concern about who pays? If it is not trivial, then the Financial Transaction Tax [SDLT] that the little people here in the UK pay for buying a house is positively draconian at 3%

I'm not arguing for it, because it is no longer a prospect here. I am trying to point out that the outcome of Cameron's intervention is that it will impact on us doubly.

sims01

:money:

ILW wrote: »

Surely whoever owns currency of any particular denomination can trade it wherever they like. or are you saying the EU can stop it somehow?

Not if the transaction is in cash, but they control electronic settlement of Euros, so can tax it, if they so desire.

CLAPTON

DVardysShadow wrote: »

We are not party to it, so why the concern about who pays? If it is not trivial, then the Financial Transaction Tax [SDLT] that the little people here in the UK pay for buying a house is positively draconian at 3%

I'm not arguing for it, because it is no longer a prospect here. I am trying to point out that the outcome of Cameron's intervention is that it will impact on us doubly.

the intention was that we would be part of it

and most of the 55 billion would be collected in the uk and was to be part of the EU budget so a transfer payment form UK to Europe

sims01

IronWolf wrote: »

Thirdly, even IF it was possible, in that case the tax is born by the banks in the eurozone, and wont be passed on to the foreign banks who are larger and more powerful. In other words, this isn't going to "isolate" us.

It's not as impossible as you may think. There are already proposals underway to force central clearing of euro-denominated derivatives trades at a clearing house on shore in the eurozone (as part of the general regulatory drive to force central clearing of derivatives). If that comes to fruition - would say the chances are 50/50, it brings a large chunk of London's banking business within the reach of any eurozone transaction tax, even if the trades are made between two non-EU entities.

pqrdef

IronWolf wrote: »

It is just a tax on the UK and Cameron quite rightly told them to !!!! off.

But he didn't, did he. The plans for shafting the City aren't part of this fiscal union wheeze that Angela dreamed up last week. They're part of other stuff that was already in the EU pipeline. Cameron asked for concessions, and they told him to !!!! off. Then he went into a sulk. And the plans for shafting the City are now higher up the agenda than they were before.

Now he's got two choices. He can go back and beg, or he can continue the process of taking us out of the EU (after all he's said about how vital it is to our economy).