Under the EU’s proposed Financial Transactions Tax, non-participating member states may bear the burden of deeper tax integration without reaping the benefits.

As a reaction to the financial crisis, in 2011, the European Commission developed a proposal for an EU-wide Financial Transactions Tax, with the purported aim of ensuring that the financial sector would contribute to the costs of the crisis. Christiana HJI Panayi looks at how these proposals have developed, and the use of enhanced cooperation between EU Member States, which has occurred due to the lack of unanimous agreement on the proposal. The UK is one of the chief opponents of the Financial Transactions Tax, citing concerns that financial institutions outside of the Member States participating in the Financial Transaction Tax may be subject to it, and worries about its effects on economic growth.