Tuesday

19th Mar 2024

EU countries explore alternatives to financial tax

  • Vestager (l) showed interest in Schauble's (r) idea (Photo: Danish EU presidency / Bjarke Oersted)

Finance ministers are exploring alternatives to an EU-wide financial transactions tax (FTT), with a new German proposal attracting interest from FTT refusenik Sweden.

"Colleagues have aired ideas of an activity tax. Another proposal is to take inspiration from British stamp duty and see if that could work. I think in the process more ideas will come forward," Danish economic affairs minister Margrethe Vestager said in Copenhagen on Saturday (31 March), after a two-day-long informal meeting of EU finance chiefs.

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 said new ideas must be put on the table because the "positions of [EU] countries have not changed" since previous talks on the subject in November.

The European Commission last year proposed an EU-wide levy of 0.1 percent on stock and bond trades and 0.01 percent on derivatives in what it says would save EU countries billions each year, but which some member stats - such as the UK and Sweden - say would prompt financial companies to flee the Union.

A new German idea put forward on Friday by finance minister Wolfgang Schauble - and seen by EUobserver - proposes a two-step approach, with a stamp duty introduced in an "intermediate" phase and tougher measures down the line. Britain already uses samp duty to levy fees on shares traded in London.

"This would not be the end of negotiations on the broader and more ambitious FTT sought by the [European] Commission," the German non-paper says.

It notes that a tax on derivatives and high-frequency trading - two parts of the markets which are today broadly untaxed and which were at the core of the 2008 banking crisis - is not "technically and politically mature" at this stage.

The UK still opposes Berlin's watered-down formula. But Sweden has indicated it might fly.

"There are stamp duties in, for example, France and in the UK that are less costly for the economy and would not have a detrimental effect on the financial markets," Swedish minister Anders Borg told press in the margins of the Copenhagen event.

For his part, Schauble sounded happy on how his non-paper was received. "We made good progress," he said after leaving the meeting on Saturday.

Denmark's Vestager - herself not a big fan of FTT - said she would put the tax debate back on the formal EU agenda in May or June.

She noted there are other ways to make the financial sector behave more prudently.

The EU parliament on Thursday adopted tighter rules for trading in derivatives - complex financial products which make bets on the future repayment of loans or movements in commodity prices - after long-drawn-out talks helped to end by Danish diplomtas.

"With this piece of legislation we are shedding light on some very unclear derivatives trading. No matter if the financial transaction tax was implemented yesterday, we would still have a lot of regulation to do in the financial sector," the Danish minister said.

Agenda

Merkel to visit Greece this WEEK

German Chancellor Merkel will Greek PM Samaras in her first visit to the debt-ridden country since the crisis began.

Latest News

  1. Borrell: 'Israel provoking famine', urges more aid access
  2. Europol: Israel-Gaza galvanising Jihadist recruitment in Europe
  3. EU to agree Israeli-settler blacklist, Borrell says
  4. EU ministers keen to use Russian profits for Ukraine ammo
  5. Call to change EIB defence spending rules hits scepticism
  6. Potential legal avenues to prosecute Navalny's killers
  7. EU summit, Gaza, Ukraine, reforms in focus this WEEK
  8. The present and future dystopia of political micro-targeting ads

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