Thursday

28th Mar 2024

Danish minister says financial tax would cost jobs

  • Denmark does not support the financial transactions tax, says minister Margrethe Vestager (Photo: Valentina Pop)

Denmark has come out against the creation of an EU financial transactions tax, saying it would hamper growth and cost "hundreds of thousands of jobs."

The country's economy minister Margrethe Vestager - who, as part of the Danish EU presidency, currently chairs the regular meetings of EU finance ministers (Ecofin) - told press in Copenhagen on Tuesday (10 January): "We would be very reluctant in promoting something that minimises growth and slashes jobs, particularly now during the crisis."

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

She noted that despite France's public pledges to fast-track the tax, no EU country has formally asked to speed up procedure.

"It is in the normal legislative machinery at the moment, the proposal was first put on the table at Ecofin a few weeks ago and all attitudes were present around the table."

She added that the tax proposal is "not very robust" because even the European Commission, which backs the levy, has estimated it would cost the EU 1.7 percent in lost GDP and "hundreds of thousands of jobs" due to financial companies relocating outside the Union.

Using more colourful language, Denmark's former foreign minister Lene Espersen - currently a Conservative member of the parliament's EU affairs committee - said in a separate briefing the same day the tax idea is "bullshit."

"Why don't they [pro-tax advocates] start with the Cayman Islands and then come and talk to us? What we need is economic growth," she quipped, in reference to the British overseas territory and tax haven.

French leader Nicolas Sarkozy has made the tax a pet project of his in the run-up to presidential elections in March. He has even promised to impose the new levy unilaterally in France if other EU countries do not follow suit despite protests from Paris' financial sector.

Britain, Sweden and Malta, like Denmark, openly oppose the project.

German Chancellor Angela Merkel has given Sarkozy support for the idea, but acknowledged her coalition is split on the issue. She is facing growing opposition from her junior coalition partner, the Free Democratic Party (FDP), which says it goes against the pro-business coalition pact.

"Coalition agreements can only be changed together and not by one side alone," Hermann Otto Solms, an FDP finance expert, told Handelsblatt on Tuesday.

For his part, Frank Scheffler, another FDP member dealing with financial matters, issued an ultimatum. "I clearly warn the chancellor against going further in this direction. She is bound to keep to the relevant agreements, otherwise we as the FDP will no longer have to keep to the arrangements,” he told the Neue Osnabruecker Zeitung.

Merkel after meeting with Sarkozy on Monday declined to say if Germany would follow a French-only tax with a German national levy, saying only: "Personally, I'm in favor of thinking about such a tax in the eurozone."

Franco-German 'growth' plan looks to EU funds and taxes

A six-point plan drafted by France and Germany suggests corporate tax 'co-ordination', an EU financial transactions tax and the re-deployment of EU funds in troubled countries as ways to spur growth and jobs.

Opinion

EU Modernisation Fund: an open door for fossil gas in Romania

Among the largest sources of financing for energy transition of central and eastern European countries, the €60bn Modernisation Fund remains far from the public eye. And perhaps that's one reason it is often used for financing fossil gas projects.

Latest News

  1. Kenyan traders react angrily to proposed EU clothes ban
  2. Lawyer suing Frontex takes aim at 'antagonistic' judges
  3. Orban's Fidesz faces low-polling jitters ahead of EU election
  4. German bank freezes account of Jewish peace group
  5. EU Modernisation Fund: an open door for fossil gas in Romania
  6. 'Swiftly dial back' interest rates, ECB told
  7. Moscow's terror attack, security and Gaza
  8. Why UK-EU defence and security deal may be difficult

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us