Michael Noonan (Limerick City, Fine Gael)

I propose to take Questions Nos. 8 and 21 together.

I have stated clearly in the past my view that any tax on financial transactions would be best applied on a wide international basis to include the major financial centres. If such a tax cannot be introduced on a global basis, it would be better if it were introduced on an EU-wide basis, as this would prevent any distortion of activity within the Union.

Our major concern is that if a financial transaction tax is introduced, it could affect the financial services industry, especially in the IFSC, and lead to some activities moving abroad. If, as some countries have proposed, the tax was to be brought in under enhanced co-operation arrangements, we would fear we could lose business to London, since the UK is strongly opposed to this initiative. In the past, certain financial activities moved to London when other countries enacted similar taxes.

The Commission is proposing that the financial transaction tax should be an "own resource" tax imposed centrally to fund the European Union and will be developing proposals in the context of the future of the EU budgets.

The current draft proposal is still being discussed at EU Council working party level and will be considered again by the Council of Ministers later this year. I have made clear our views, as has the Taoiseach, in discussion with our European colleagues.

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