Tuesday

19th Mar 2024

EU financial transactions tax gets enough support to take off

  • How will the money be used - that is one of the next big questions (Photo: Images_of_Money)

A threshold-breaking eleven member states have agreed to push ahead with a financial transactions tax but the political breakthrough is tempered by a number of unanswered questions.

"Today we have received a clear and very welcome signal that there will be enough member states on board for an EU Financial Transactions Tax," EU tax commissioner Algirdas Semeta said Tuesday (9 October).

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

He promised to come forward with a decision in November but noted that at least nine countries have to formally make a request in order to trigger a legislative process for a splinter group of member states.

So far, Germany, France, Austria, Portugal, Belgium, Slovenia and Greece have sent a letter to the commission in favour of the move. Italy, Spain, Slovakia and Estonia promised to do so after Tuesday's meeting of finance ministers.

"We would prefer to get the remaining letters before the middle of October," said Semeta noting that the commission both has to make an assessment of the applications as well as put forward a proposal by the promised deadline of 13 November, the date of the next finance ministers meeting.

The FTT progress is a victory particularly for French president Francois Hollande, who has been one of the most vocal supporters of this so-called Robin Hood tax. More broadly it has symbolic importance, with the agreement coming on the back of several months of discussion about the feasibility and possibility of introducing such a levy.

But still the tax remains controversial - six of the 17 euro countries are not among the pioneering group - and even where there is broad agreement, much of the detail still has to be elaborated.

It is not clear what the scope of the tax will be, such as whether it will include foreign exchange transactions.

The UK, a staunch opponent of the tax, reminded other member states that the EU treaty says that any proposal for so-called enhanced cooperation between a group of member states must not undermine the internal market.

"We want to see a specific proposal," said UK finance minister George Osborne. Poland, though taking a less hawkish line, was in agreement. "It would be good to have more detail," said finance minister Jacek Rostovski.

Semata, for his part, said that the commission could proceed on the basis of the proposal it made last year. At the time, it suggested a minimum tax rate for the trading of bonds and shares of 0.1 percent and 0.01 percent for the much larger market of derivative products (bets on currency fluctuations, mortgages, loans or even the weather).

The commissioner said participating member states could spend the money raised by the levy "where they deem appropriate" suggesting that development aid commitments could be one area.

The commission has also suggested that part of the money raised could be put towards the EU budget in return for lowering a country's automatic gross national income based contribution.

But this is a separate decision that would have to be taken a part of an overall EU budget agreement.

The commission proposal allowing the FTT group to go ahead, due in November, has to be agreed by a qualified majority of all 27 member states. The European Parliament must also give its consent.

Tax property not work, governments told

Governments should tax property and consumption ahead of income according to the Commission's 2013 Annual Growth Survey published on Wednesday.

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?

Stakeholders' Highlights

  1. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  2. UNOPSFostering health system resilience in fragile and conflict-affected countries
  3. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  4. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  5. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  6. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA

Join EUobserver

EU news that matters

Join us