Schaeuble says Tobin tax opposition is "parochial"
LONDON (Reuters) - UK opposition to taxing stock, bond and derivatives trades is stopping the European Union from making banks help "clean up the mess" from the financial crisis, Germany's finance minister Wolfgang Schaeuble said on Monday.
"If the financial transaction tax were introduced in all of Europe, which includes the UK, it could help reduce volatility further, not least because it could make leveraged trading less profitable," Schaeuble said in a speech in London.
"Short-sighted parochialism" is stopping progress, he said.
Chancellor George Osborne, who will meet with Schaeuble later on Monday, opposes a Tobin-style tax on derivatives and other transactions unless applied globally, to avoid banks and brokers taking their business elsewhere.
The UK has already imposed a balance sheet tax on banks.
Schaeuble conceded at a meeting of finance ministers from the world's top 20 economies (G20) at the weekend that hopes for a global Tobin tax -- named after the U.S. economist who first mooted one in the 1970s -- have effectively ended after Britain, the United States and Canada lined up to oppose such a move.
Germany and France still hope to push ahead at the EU level but the UK and the Czech Republic are opposed. Unanimity is required to impose an EU tax on a member state and one idea is to have a euro zone Tobin tax.
Andrew Tyrie, chairman of the treasury committee in Britain's parliament, who was present at the speech, asked Schaeuble during a question-and-answer session: "What evidence do you have that the derivatives business will not just move to markets outside the euro area, in particular to Asia?"
Sweden, an EU member, tried introducing a Tobin tax unilaterally in the 1980s but had to scrap it after market participants took evasive action.
"If you wait until everyone will have it you will never get it," Schaeuble said in response.
The United States and others would quickly bring in similar measures if the EU went ahead, Schaeuble said.
"If we introduced it in all of the European Union it wouldn't be a long time before the United States will include it themselves... if we go ahead a lot of other parts of the world economy will follow us," he said at a forum in London.
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