The Irish Government needs to clarify its position on the proposed introduction of a European Financial Transactions Tax in light of the comments by a French Minister that the tax will be in place by year end, according to Fianna Fáil Finance Spokesperson Michael McGrath.
French minister for European affairs Jean Leonetti is quoted as saying on French television today, “The Financial Transactions Tax is on the programme for the next European summit on January 30. French President Nicolas Sarkozy and German Chancellor Angela Merkel have decided on this and it will be put in place before the end of 2012.”
Deputy McGrath commented, “The British Prime Minister David Cameron made it clear at last month’s summit that Britain is opposed to such a tax applying to the City of London. The introduction of a financial transactions tax in Ireland, while Britain remains outside the scope of such a tax, could have serious consequences for the future of the financial services industry here. We cannot afford a situation where Ireland’s financial services industry is put at a major disadvantage compared to London.
“While there is undoubtedly merit in the idea of building up resources funded by the financial services industry itself to deal with future shocks, this cannot be done in a way that would undermine Ireland’s attractiveness as a financial services centre.
“IFSC firms now employ 33,000 in Ireland. The industry is a major contributor to the Irish economy. The Strategy for the International Financial Services Industry in Ireland 2011-2016, launched in July 2011, targets the creation of 10,000 net new jobs. Financial Services has the potential to be one of the pillars on which we rebuild the Irish economy.
“With the next European summit due on 30 January and speculation that France and Germany will table their proposals for this tax prior to the summit, the Taoiseach Enda Kenny needs to clarify Ireland’s position on the introduction of such a tax, particularly if our nearest neighbours in the UK will remain outside.”