MNI EXCLUSIVE: Brexit Could Be Final Blow For European FTT

--Paris, Berlin Can't Advocate FTT While Luring Banks From City

By Jean Comte

     BRUSSELS (MNI) - The UK's exit from the European Union could be the final

nail in the coffin for a European Financial Transaction Tax as the 10 member

states currently working on setting the levy have asked their experts to draw a

report assessing the impact of Brexit on expected revenues from the tax, MNI has

learnt. 

     There is no deadline for the completion of the review and no further

meetings of the 10 ministers are planned. The 10 countries are Austria, Belgium,

France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain.

The move appears to have been pushed by France, whose president and finance

ministers have already said that Brexit was endangering the project. But Germany

is also now reluctant, according to one source following the talks. 

     "With Brexit approaching, France and Germany are trying to lure

institutions from the City," said the source. "It is difficult for them to be

advocating an FTT at the same time -- it sends out conflicting messages," the

source added.

Brexit comes on top of a number of other disagreements currently preventing the

10 countries hammering out a final agreement. 

     In particular, sources told MNI that the possible exemption of pension

funds was problematic. Most countries agreed only reluctantly to it in

September, under pressure from Belgium and Slovakia, according to one official.

Brussels-based representatives from the financial industry told MNI they have

stopped any kind of lobbying on the issue. "It is obviously getting stuck by

itself, it has stopped being a priority," said one lobbbyist.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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