What now? EU

CLAPTON

sims01 wrote: »

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.

well
goodness me
a simple misunderstanding then?

sims01

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.

Yes. The only place where you can truly have Euro reserves is at the ECB (this is how the ECB controls the amount of money in circulation).

If a US bank holds Euro reserves that means they have an account either directly at the ECB or via an intermediary correspondent bank that holds the Euros at the ECB for them.

The only way to avoid a transfer at the ECB is, if both counterparties happen to use the same correspondent bank to hold their Euros.

pqrdef

sims01 wrote: »

Neither the press release nor the agreement reached on Friday even mentioned a transaction tax or banking regulation.

So what were the famous "safeguards" that Cameron talked to Merkozy about in their 45-minute private chit-chat before dinner?

prosaver

have you heard that the germans have started printing the Deutsche mark

sims01

pqrdef wrote: »

So what were the famous "safeguards" that Cameron talked to Merkozy about in their 45-minute private chit-chat before dinner?

Banking regulation was never the topic of this summit.

Cameron wanted an exemption from any banking regulation that the EU may decide in the future as a condition for agreeing to something totally unrelated (budgetary rules).

Commonly such a negotiation tactic is called blackmail and it is often counterproductive. If he had brought up his safeguards at subsequent meetings that were actually about banking regulation, it would have made a bit more sense..

toby3000

ILW wrote: »

Do you honestly beleve that if the UK left the EU that they would set up import tariffs against UK goods?

The EU imposes import tariffs on goods from other non-EU countries, so why not the UK? I have no idea how it breaks down on different products, but from the European Commission Website;

"the EU average level of customs duty protection amounts to around 4% on industrial goods, taking into account MFN (Most Favoured Nations) rates."

And even if they don't impose tariffs, they can still make life difficult. Didn't France protect it's car industry for years by demanding that all imports came through one port? Or is that an urban myth?

Masomnia

pqrdef wrote: »

So what were the famous "safeguards" that Cameron talked to Merkozy about in their 45-minute private chit-chat before dinner?

Precisely the point. Cameron knew the tax was coming so wanted a safeguard against it. Sarkozy wouldn't give one; it's obvious they want the tax, they just wanted us to sign up first so we couldn't do anything about it when the tax happened!

DVardysShadow

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?

You would pay the tax to get the Euros. Or someone would. Unless you were happy to take Euros printed outside the Eurozone ...

DVardysShadow

ILW wrote: »

Only if the trade involved at least one EU country.

You are going circular here. We are talking about an EU or Eurozone wide tax and avoiding it by taking the transaction through a 3rd country. So the basis of the discussion is that it would have to involve a Euro country.

Generali

Just to make the point, until recently CHAPS allowed EUR as well as GBP payments. CHAPS payments within the UK didn't use TARGET2 (from memory at least) so there was no ECB involvement.

The City IMHO was built on the lack of a withholding tax (a tax on the bond interest payments and/or share dividends for foreigners). A Tobin Tax elsewhere would be a massive boost for the UK.

It's all very well for people to pretend that the bastad banks would pay the Tobin Tax but ultimately it would be passed on to their customers for the most part, especially pension investors. It would become another tax on pensions.