Over the past month or so, the City has woken up to the idea that 11 countries in the European Union are planning to introduce a Financial Transaction Tax.
The big banks never really thought an idea originally dreamt up by James Tobin in the early 1970s would come to anything, but are now lobbying like crazy against a 0.1% levy on trading shares and bonds and a 0.01% tax on derivatives.
On the face of it, the campaign is succeeding. There have been reports out of Brussels that the FTT will be delayed, watered down to the point of irrelevance, or scrapped altogether. Yet Europe's tax commissioner, Algirdas Semeta, made it clear at the weekend that there had been no changes as yet to the plans for the FTT and that the financial sector - "probably the most powerful lobby in the world" - should expect to pay its share.
Semeta seems unimpressed by the argument that an FTT will turn Europe's financial districts into the modern-day equivalent of the dust bowls of the 1930s, hardly surprisingly given that seven out of the 20 biggest stock markets in the world - including London - already have FTTs. Nor does he seem that moved by the crocodile tears shed by the City for pensioners allegedly facing impoverishment from the Tobin tax, given the ruthless way in which the financial sector has gouged its customers with management charges far higher than the proposed rates for the FTT.
Reports of the death of the FTT look exaggerated. Some form of the tax is going to be introduced after the German elections in September, not least because the opposition SDP will probably make it a condition of a coalition agreement with Angela Merkel's CDU. The City is engaged in a damage limitation exercise, but should count itself lucky. Other sectors of the economy - arguably more useful ones - pay VAT at 20%.
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