José Sartorius: “Most Spanish employers understand UK’s ‘no’ to the Tobin Tax”

By Jacobo de Regoyos, in Brussels | José Sartorius Álvarez de Bohorques devotes most of his time to his role as a member of the European Economic and Social Committee. He was appointed by the Spanish Confederation of Employers’ Organizations CEOE and the Banking Association AEB.

Are the Spanish entrepreneurs against the Tobin tax? Well, I have not met with all Spanish entrepreneurs, but the AEB and the CEOE are contrary to the Tobin Tax. And I’m compelled to think that it just makes sense: any tax on the banking sector will increase credit costs. Is it in employers’ interest that credit becomes more expensive? Besides, what right now the real economy needs most is credit.

That is a ‘no’ to the Tobin Tax, even if it were applied only at a European level. We must be careful because any fees that we exclusively impose at a European level can cause the relocation of the banking business. That is quite clear. We are in a globalised world and more so in the finance sector. If the Tobin Tax is set by four countries within the EU but not the rest, there is no doubt whatsoever that a relocation will ensue. And if we apply it everywhere but in London, then the whole business now in Frankfurt, Paris or Madrid will move to London. Unless the tax is put in place by the G-20, as a global solution, it will generate unbalances.

Since the financial sector is partially responsible for the current crisis and having received so much public cash, could you consider the possibility of a fair way in which financial transactions could be taxed? Well, let’s read the small print, shall we? These capital injections into the financial sector have not been the same in all countries. Many banks haven’t required any public money and have so far cost nothing to the taxpayers, so why should they suffer this tax? Must they pay, too? For instance, France has helped its banks to a higher extent than in some other European countries and no French entities have failed, whereas Spanish banks have endured harsher conditions even taking into account the volume of public capital made available to them through the FROB. Then, let’s not forget Basel II, III and IV, core capital and capital reserve rules, and so on and forth, all of which affects credit flows in the real economy. This is what I try to explain.

Would you say then that the UK is right to oppose the Tobin Tax? Oh well, err… Listen, the UK is a very singular case. It’s the City, it’s London. The City represents a remarkable percentage of the British GDP. I do understand what they defend, because what would today stop any financial firm from moving to Hong Kong, Singapore, or to Shanghai? I believe the UK’s position is very reasonable.

And it is Spanish president Mariano Rajoy’s support to France’s president Nicolas Sarkozy reasonable, regarding the Tobin Tax? Next question, please.