PARIS: The securities lending industry’s long-running concerns over the negative effect of a European financial transaction tax on revenues are at risk of being disregarded by French officials looking to tackle climate change.
In an opinion piece published in Europe1 this week, France’s finance minister Bruno Le Maire, foreign minister Jean-Yves Le Drian, environment minister Nicolas Hulot and higher education minister Frederique Vidal, claimed the tax could raise up to €5 billion ($5.9 billion) per year by 2020.
“We will push for this tax to become applicable in Europe and will ask everyone to take part in this solidarity effort,” the officials explained.
French ministers added their voices to that of French President Emmanuel Macron, who committed to push for a European financial transaction tax as long as it was effective in July.
He added that the decision was still subject to whether Britain would have access to EU financial markets after Brexit.
Macron said that otherwise, firms would move to London where the tax will not apply.
The introduction of financial transactions tax has been repeatedly raised and then shelved since 2012 when talks between 11 EU member states initially began.
In 2015, when the implementation of the tax was being discussed, the International Securities Lending Association worried it would mean securities lending transactions would result in a large reduction in securities lending activity in the countries affected as the economics of these short term, low risk and return transactions, would be dwarfed by the tax.”
“This would have very negative implications for the functioning of the wider financial markets, and for the successful delivery of a European capital markets union.”
