What now? EU

ILW

DVardysShadow wrote: »

Well Sarkozy will have to be satisfied with a tax across the Eurozone plus whoever else. And on Euro transactions.

And specifically for Euro transactions, if the Eurozone applied the tax, it would be a bit rich for us not to apply the tax and not to hand it over. Why should we get away with being an offshore haven for Euro transactions? It would be arrogant in the extreme to presume to f!! them over in that way as you put it

The point I was trying to make (which may be way off the mark) is that much of this exchange business will just move to jurisdictions which do not charge the tax. It can only work if it is global.

CLAPTON

the tax as proposed was on financial transactions within the 27 members of the community

it had nothing specificially to do with the euro as a currency

ILW

CLAPTON wrote: »

the tax as proposed was on financial transactions within the 27 members of the community

it had nothing specificially to do with the euro as a currency

So would that mean that if these transactions were carried out through a third party (ie London now) the tax could be avoided. If that is the case then Cameron has played a blinder.

sims01

ILW wrote: »

I am getting confused, If I were to buy say 1000 Euros and have them credited to my bank account, what would stop me selling them to say an American? How could I be forced to go through a European exchange?

Any electronic transfer of Euros from one bank to another usually involves a transfer at the ECB (from the account of your bank to the account of the bank of whoever you are transfering to), which could be made subject to a tax, although there are exceptions to that, which could be exploited.

In any case, they don't really care about small transactions you and me are doing, but about wholesale financial transactions international banks are doing. And those can be forced to do all sorts of funny things via regulation.

ILW

sims01 wrote: »

Any electronic transfer of Euros from one bank to another usually involves a transfer at the ECB (from the account of your bank to the account of the bank of whoever you are transfering to), which could be made subject to a tax, although there are exceptions to that, which could be exploited.

In any case, they don't really care about small transactions you and me are doing, but about wholesale financial transactions international banks are doing. And those can be forced to do all sorts of funny things via regulation.

Would this be the case if the two banks involved were not European?

For example a US bank holding reserves in Euros to a Russian bank.

DVardysShadow

ILW wrote: »

So would that mean that if these transactions were carried out through a third party (ie London now) the tax could be avoided. If that is the case then Cameron has played a blinder.

No, the transaction would have to go out of zone and back in. And be taxed double. Dave has been played a true blinder, I suspect.

pqrdef

DVardysShadow wrote: »

Well Sarkozy will have to be satisfied with a tax across the Eurozone plus whoever else. And on Euro transactions.

But as John Major said, the tax is a heat-seeking missile aimed at the City. If they can't hit London with it, they'd be crazy to turn it on themselves.

The question is whether they can hit London. Strictly, probably not, but we could get backed into a corner where quitting is the only alternative.

If our approach to the EU is that we don't want to take part in policy-making, we just want to scoff from the sidelines and then veto anything we don't like, it's only a matter of time before we get presented with a choice. Either we join in like we really want to be there, or we just leave altogether.

ILW

DVardysShadow wrote: »

No, the transaction would have to go out of zone and back in. And be taxed double. Dave has been played a true blinder, I suspect.

Only if the trade involved at least one EU country.

sims01

CLAPTON wrote: »

the tax as proposed was on financial transactions within the 27 members of the community

it had nothing specificially to do with the euro as a currency

No such thing was proposed at the summit at all.

The only mention of a transaction tax was a memo a few days earlier where Sarkozy outlined that he'd like one for at least the whole EU at some point - well everyone knew that already and everyone also knew he'll never get it agreed. This is however all still at a very early stage and nowhere near being formally proposed. Neither the press release nor the agreement reached on Friday even mentioned a transaction tax or banking regulation.

DVardysShadow

ILW wrote: »

Would this be the case if the two banks involved were not European?

For example a US bank holding reserves in Euros to a Russian bank.

For an electronic transfer, what is transferred? If there is no central reference, the temptation to transfer the same electronic money twice looks too enticing.