The European Banking Federation (EBF) calls on the ECOFIN Council to carefully consider the implications of any decision on the implementation of a Financial Transaction Tax (FTT).

Together with another eight major association1, representing various sectors of the financial services industry, the Federation voices serious concerns over the introduction of the proposed Financial Transaction Tax under the enhanced cooperation procedure in 11 Member States. In a letter to EU Finance Ministers the associations outline the wider effects it would have across the EU and even beyond.

“While we fully recognise the objective of generating new sources of revenue for public finances,” explained Guido Ravoet, Chief Executive of the EBF, “we can only regret the negative consequences the FTT - as it is currently foreseen - would have on competition among financial services actors in Europe, merely on the basis of their location in or connection to the FTT zone.”

The industry fears that introducing an FTT based on a territorial scope limited to 11 Member States will result in an extremely high pressure on these countries’ financial services operators, particularly at a time of high economic uncertainty.

“We are convinced that the FTT would significantly increase the dependence of these countries’ governments on financial markets outside the FTT zone and outside Europe,” added Ravoet.

The signatories of the letter, therefore, urge ECOFIN Ministers to reconsider the Commission’s proposal in light of the detrimental effects that will accrue from its imposition.

The letter, made public today, can be found on www.ebf-fbe.eu and on the websites of the respective associations.