The UK has rejected a call from European Commission president Jose Manuel Barroso for a new continent-wide banking tax to help raise billions to ease the Euro zone debt crisis.
Barroso said the new financial transactions tax could potentially raise about 80 billion dollars per year, helping ease Europe's debt crisis which he calls the biggest challenge in the history of the European Union.
It is time for the financial sector to make a contribution back to society, he said in his annual address to the European parliament.
But the UK and the US are both against the plan, which will be discussed at a summit of European leaders next month. Both countries are home to some of the world's biggest banks and want a bank tax to apply globally or not at all.
Britain, at the heart of the financial industry, reiterated demands for any such tax to be applied globally, so as to ensure a level playing field. Otherwise the transactions covered would simply relocate, a UK Treasury spokesman said.
Member of the European Parliament (MEP) Daniel Hannon, from the UK's ruling Conservative Party, says the Euro zone crisis is not Britain's problem.
Where do most financial transactions in the EU take place? They take place in the city of London, he said. In other words we are going to be stuck with the bill in order to prop up a currency which we declined to join.
We should issue a very clear 'No way Jose'. It is not our problem. We kept the pound.”
Speaking in Brussels, Barroso said he wanted the 27-member EU to become more integrated both politically and economically.
He called for a stronger central government in Brussels and called for the introduction of European bonds to even out the price all countries in the region pay for their loans.