The European Parliament in Strasbourg voted by an overwhelming majority on March 8 to impose a financial transaction tax—a so-called Tobin Tax. The tax, charged on every single trade conducted by European banks, will bring €200 billion annually directly into EU coffers.

When implemented, the effect of this tax on the UK will be massively disproportionate, given that around 80 percent of all European hedge fund transactions take place in London. One estimate calculated that, without burden-sharing arrangements, the UK would send up to £180 billion to the EU under this proposal!

The tax measure is being strongly promoted by German members of the European Parliament. Martin Schulz, leader of the Progressive Alliance of Socialists and Democrats group of meps, told the Parliament: “We want to send out an institutional signal saying that the private sector bears its part of the responsibility for the crisis.” Germany’s Social Democratic Party has long called for a global tax on financial transactions.

Although the tax imposition is not yet legally binding, according to the Telegraph the European Parliament is eager to change the way the European Union is funded—from member-state transfers to direct taxation—and this vote will therefore put pressure on the European Commission to enact the new tax via legislation.

However, unless implemented globally, the tax would simply drive business away from the EU, to other, more friendly, financial centers such as Switzerland, Hong Kong or Singapore.

In a rousing speech to the Parliament during the debate, Nigel Farage, leader of the UK Independence Party, called the vote “kamikaze economics.” He declared:

The biggest foreign exchange market in the world and the biggest financial sector in the world is in London. … I would say that there is a PLOT afoot to stop the Anglo-Saxons going on doing all of their business. …If we continue down this route, Britain will lose its biggest single industry! The time has come for the City of London and its financial markets to rise up against membership of this European Union [and] its massive socialist experiment.

It is well known that London’s position as the world’s leading financial center is attributable to its major competitive advantages, which include a highly skilled labor force, an ideal time-zone position, and spanning the globe from the Far East to California with English, its native tongue and the language of global business. Additionally, relatively low levels of taxation in the UK and excellent global airport connections have all contributed to London’s position as world financial capital.

Ironically, London’s very success originated in the need for funding to defeat a great European tyrant, Louis xiv, three centuries ago, with the founding of the Bank of England in 1694. From that point, the City of London became crucial to Britain’s rise to world-power status and the maintenance of the largest and most benign empire the world has ever seen during the 19th to mid-20th centuries.

But London’s preeminent position in financial services has provoked longstanding jealousy from the EU, particularly Frankfurt, Germany’s capital markets hub, which has long harbored ambitions of stealing London’s crown as Europe’s financial capital.

British Member of Parliament Bill Cash, who sits on the EU’s Economic and Monetary Affairs Committee, said that he has no doubt that the EU Parliament’s motivation is resentment of the success of London. In a scathing article published last Wednesday, Cash described the great folly of allowing the EU to directly tax London’s financial markets (Bill Cash’s European Journal; emphasis mine):

Having made a scapegoat of the City … the last Labor government quietly handed over the keys to the City of London to the European Union. At a crucial summit in June 2009, the UK government’s sovereignty over the regulation of banking and financial services was removed, as EU member states agreed to establish three new European supervisory bodies (esas) for financial services and markets.[I]t is only now that many in the City are waking up to the fact that their new masters no longer even reside in London. The chairmanships of all the new authorities have gone to non-British nationals with little or no experience of the working environment of the City. Although at this point the new agencies are small and fledgling, their governance framework gives equal weight to all EU members, despite almost all the major European financial transactions taking place in London. …I sit on the EU Economic and Monetary Affairs Committee where much of this new legislation is being debated. … I have been left in no doubt that the motivation of the continental legislators is resentment of the success of London. They have no idea what the conditions need to be for a financial marketplace to prosper. …Already a new directive on market infrastructure—which may turn out to favor the Deutsche Bourse, damaging the pan-European trading platforms of London’s lch Clearnet—is being rushed through. Further rules on derivatives trading are planned in the new Market Abuse Directive. A review of the Markets in Financial Instruments Directive is also imminent. No-one in the UK is lobbying me on these matters because they probably have not spotted the threats yet. It is almost as if the Commission wants to get all these new laws introduced before London wakes up to what is going on in Brussels.

In an interview with this magazine in December last year, the president of the Campaign for an Independent Britain, Lord Stoddart of Swindon, said the tipping point for Britain’s relationship with the EU will come only when the business community has finally had enough. Will this latest attack on London’s financial center provide that trigger?

Winston Churchill said that a nation will pay dearly to ransom what it has neglected to defend. Will Britain wake up too late to this threat to its “biggest single industry”?

Bible prophecy speaks of a “raiser of taxes” hailing from a great northern power, in fact the seventh and final resurrection of the Holy Roman Empire (Daniel 11:20). We have consistently drawn attention to the European Union being the very fulfillment of that prophecy. Thus it is that the imposition of this latest tax impost is quite consistent with yet another aspect of the great prophecies of Daniel and Revelation relating to this beastly power.

Bible prophecy also foretells that there is a time coming soon when no man will be able to buy or sell without the EU’s permission (Revelation 13:16-17). We have warned of this time for over 70 years. Last week’s vote by the European Parliament has brought that day just one step closer.