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ICAP could quit EU over transaction tax

LONDON : Broking giant ICAP will quit the European Union if a financial transactions tax proposed by Germany and Fran

Published August 21, 2011 Updated August 21, 2011 02:59pm

1 min

By Muhammad Iqbal

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"Companies like ICAP will simply move elsewhere outside the EU if Nicolas Sarkozy and Angela Merkel push ahead with this silly tax," ICAP chief executive Michael Spencer was quoted as saying in the Independent on Sunday newspaper.

The French and German leaders proposed the tax on Tuesday as part of proposals to shield the euro zone from a deepening debt crisis, but Britain and the Netherlands have opposed such a measure, particularly if it does not apply globally.

Spencer, who has been a major donor to Britain's ruling Conservative Party, said that financial firms would relocate to New York and Singapore if such a tax came into being.

"This is another cynical threat by Sarkozy who knows this tax would overwhelmingly hit London as this is where trillions of dollars are traded each day," he said.

"It could only work if adopted globally."

ICAP reported a 10 percent rise in trading on its electronic platforms to $878 billion in the second quarter of this year.

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