Tobin tax legal challenge sparks row

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The government has provoked a fresh row with Brussels by launching legal proceedings against a €35bn Financial Transaction Tax (FTT), or ‘Tobin tax’, agreed by 11 EU member states in February.

Chancellor George Osborne confirmed...

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Robert Lovell
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24th Apr 2013 16:28

Leaked memo reveals “fundamental legal concerns and fears”

Fundamental legal concerns and fears over costs are a major obstacle among the 11 countries that have agreed to pursue a FTT, according to leaked documents seen by The Telegraph.

An internal Brussels memo has exposed major problems with the tax and the side-effects among the participating countries.

The leak comes as an unexpected boost for the UK’s challenge in the EU courts to the FTT, which the Chancellor revealed last week in Washington.

The secret “non-paper”, dated 16 April, raises detailed concerns at the cost to governments of issuing bonds and fears that Europe's financial system will be damaged by the tax.

It also warns that the Tobin tax could “snuff out” the bond repurchase market by imposing a heavy cost burden on "repo" operations that involve high volumes of transactions.

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