Given the renewed momentum of negotiations over the introduction of a financial transaction tax (FTT) in 11 EU member states, Insurance Europe has reiterated a number of concerns relating to this project.
Insurance Europe remains convinced that an FTT would have a negative impact on the real economy. FTTs increase costs for users of financial markets, be they governments, pension funds, insurers or other corporates. This will inevitably have a negative impact on end-users of financial markets: consumers of financial products, such as insurance policyholders or pension-fund beneficiaries.
In addition, the introduction of an FTT in the EU could have a series of unintended consequences (eg the reduced market liquidity of EU shares, the increased cost of capital and the relocation of trading activities), with the resulting unfavourable outcomes in terms of economic growth.
Of particular concern is that an FTT imposed on retirement and other long-term insurance savings products would have a negative effect on pension provision in Europe and would be inconsistent with the objective put forward by the European Commission and the efforts of member states to increase the role of complementary retirement savings plans in pension systems in response to demographic changes.
Therefore, all retirement products, regardless of their legal form, should be exempt from the scope of the FTT. The most effective way to achieve this would be to leave the definition of “pension products” which should fall outside the scope of the FTT to national authorities.
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