The arrogance of the EU knows no bounds
Despite all the evidence to the contrary, lessons about the EU never seemed to be learned
Every time something goes wrong in this country, feckless managers work hard to ensure they don’t loose their jobs for gross incompetence. From hospitals to hamburgers you see this lack of accountability as some poor junior gets lined up to be shot.
Indeed with so much horse meat rolling around the food chain at the moment, you have to wonder whether those nags being put down at Becher’s Brook over the year were not so much mercy killings as to cater for a rush at the burger vans at Aintree.
Lessons are rarely learned, and instead a reactionary culture prevails. And so it is with the European Union. Except those in Brussels do not do under the radar. Indeed, it seems that they blow klaxons, shouting, "Look at what we are doing!" in the full knowledge that our so-called representatives will willfully fail to do anything about it.
Fresh from MEPs bizarrely willing to defy their own constituents over the budget, some European countries have decided that they will finally enact their revenge on the financial markets with a transaction tax (FTT).
The FTT will see 0.1 percent charge on shares and bonds, money market instruments, repurchase agreements, securities lending agreements, and 0.01 percent on derivatives products. The EU claimed that it would raise up to £30bn in revenues and force banks to “engage in more responsible activities” but the key message came later.
Rather than an attempt to stop high frequency trading, the real reasons were laid bare by EU Tax Commissioner Algirdas Semeta when he said the EU financial sector was “under-taxed” and that the charges would ensure that the “financial sector makes a fair and substantial contribution to public revenues”.
So there you have it. Like taxes on cigarettes - where the government admitted that there will always be a core 20 percent or so that would never stop smoking - the real reason is revenue raising.
If you were in New York or London you would be pretty pleased about this, no? Leave those idiots over the channel to get on with penalising their own financial markets, right? Well, unfortunately the eurocrats have thought about this.
In an extraordinary move, eurocrats have expanded the “residence principle” - where a tax is imposed on all trading carried out by resident firms, regardless of where the trade occurred - to include an ‘issuance principle”. Essentially, if banks trade shares in Volkswagen between London and New York, that trade will be liable for tax so not only will it hit financial firms, it will hit non-financial companies’ risk management activities as they use stock mechanisms to offset risk.
Frankly this is a base grab that ignores all territorial rights and tax jurisdictions and arrogantly extends EU reach into other countries’ tax domain.
It is ironic that as EU-champions try to laud the start of free trade area negotiations between the EU and the US, the useful idiots in Brussels, Paris and Frankfurt have gone out of their way to anger companies across the globe. As a submission from a coalition of American business organisations put it, this FTT is “the unilateral imposition of a global FTT”.
In addition, the group, which includes the US Chamber of Commerce, wrote:
"These novel and unilateral theories of tax jurisdiction are both unprecedented and inconsistent with existing norms of international tax law and long standing treaty commitments.”
It added that there was “a high risk that their adoption could lead to double and multiple taxation, a deterioration of international tax co-operation and trade protectionism”.
It is encouraging that these idiots have managed to even annoy the CBI. You know, that EU-philic organisation that has consistently expressed opposition to any idea that the UK and other European countries should have a say in their own taxation, laws and spending.
Essentially, to escape this law, firms in other countries would have to cease financial service business with the 11 nations involved. And you know what, I think they should. The only ones that are going to solve this idiocy will be companies themselves. Money talks, money walks. If these countries want to shoot themselves in the foot then so be it.
A few weeks ago, David Cameron invited French millionaires to cross La Manche. I tell you what Dave, extend that invitation. Extend to to VW and BMW. Extend it to EDF. Encourage these companies to register in the UK.
The increasing land grab by the EU is only exceeded by its arrogance and if this extra-territorial grab is not stopped by international law, then none, and I mean none of the rights of member states will ever be respected again.
You may accuse me of hyperbole but this encapsulates where we heading with the bureaucratic monstrosity that sits in Brussels pretending it cares about the rule of law, citizens’ rights and economic growth.
We have already seen that Brussels doesn’t give a damn about the concept of the single market when it comes to the UK and its financial market. Now we can see that it doesn’t give a damn about the sovereignty of non-European countries either.
Simon Miller is a Contributing Editor to the Commentator
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