Monday

20th Nov 2017

French minister stokes divisions on EU financial tax

A junior minister in the French government has predicted there will be an EU financial transactions tax by the end of 2012 in remarks likely to annoy fellow EU countries on many levels.

EU affairs minister Jean Leonetti spoke out on the subject on the French LCI news channel on Wednesday (4 December), saying: "It's on the agenda of the next EU summit, Nicolas Sarkozy and Angela Merkel have decided it and it will be put in place before the end of 2012."

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

He added: "France and Germany have already agreed on it. And I believe the new Italian government, with which we have been in contact, is not opposed. Twenty six out of 27, in fact all the EU countries except Great Britain have no objections to the idea, and except Sweden, which had a bad experiment in this area."

Leonetti's prediction is more hawkish than that of earlier pro-tax advocates.

The French government previously said it would put forward a study on the subject on 23 January with a view to implementation in 2013.

The European Commission last September put out detailed proposals on a tax designed to capture €57 billion a year from financial companies which do business in the EU and to enter into force on 1 January 2014.

The junior minister's attempt to depict the UK as a lone or near-lone opponent of the measure rubs salt into the wound of the December EU summit in which London vetoed an EU Treaty change in an attempt to get an opt-out on the tax.

Despite his auto-correction on Sweden, he understated the extent of antipathy to the scheme.

When EU finance ministers last discussed the idea in November, Austria, Belgium, Finland, Greece, Hungary, Portugal and Spain - none of which have large financial sectors - backed the idea.

But Bulgaria and the Czech Republic also voiced concerns, while Polish finance minister Jacek Rostowski at the time said the Union is "very, very divided" on it.

For his part, Swedish minister Anders Borg said it would "reduce growth and increase borrowing costs" in indebted EU countries, as well as making it harder for EU banks to build up rainy day capital.

Sweden unilaterally introduced a tax in the 1980s but saw a sharp decline in trading of some financial products on its territory - a precedent which indicates what might happen to the City of London if the EU goes it alone without US or Asian support.

Meanwhile, Leonetti's language - that French and German leaders "Nicolas Sarkozy and Angela Merkel have decided it" - will do little to assuage fears in smaller EU countries that the pair have hijacked power in an EU system which is supposed to work on the basis of consensus among the 27 member states on sensitive issues such as taxation.

UK left out as 26 EU countries to draft new treaty

A group of 26 EU member states is to forge ahead with an agreement on tightening economic governance in the eurozone, following a summit in Brussels that saw the UK sidelined after it overplayed its hand. (Updated 1.30pm Friday).

MEPs ponder how to fight tax havens

After the Paradise Papers brought new revelations about tax dodging across the globe, including in the EU, the European Parliament wonders how to step up the fight.

MEPs ponder how to fight tax havens

After the Paradise Papers brought new revelations about tax dodging across the globe, including in the EU, the European Parliament wonders how to step up the fight.

News in Brief

  1. Bonn climate talks extend into Friday evening
  2. UK needs to move on Brexit by early December, Tusk says
  3. Puigdemont extradition decision postponed to December
  4. Ireland wants written UK guarantees to avoid hard border
  5. US did not obstruct climate talks, says German minister
  6. EU signs social declaration
  7. Puigdemont to be heard by Belgian judges
  8. Steep fall in migrants reaching EU

Stakeholders' Highlights

  1. European Jewish CongressAntisemitism in Europe Today: Is It Still a Threat to Free and Open Society?
  2. Counter BalanceNew Report: Juncker Plan Backs Billions in Fossil Fuels and Carbon-Heavy Infrastructure
  3. Nordic Council of MinistersNordic countries prioritise fossil fuel subsidy reform
  4. Mission of China to the EUNew era for China brings new opportunities to all
  5. ACCASmall and Medium Sized Practices Must 'Offer the Whole Package'
  6. UNICEFAhead of the African Union - EU Summit, Survey Highlights Impact of Conflict on Education
  7. Nordic Council of MinistersNordic Council Calls for Closer Co-Operation on Foreign Policy
  8. Swedish EnterprisesTrilogue Negotiations - Striking the Balance Between Transparency and Efficiency
  9. Access EuropeProspects for US-EU Relations Under the Trump Administration - 28 November 2017
  10. World Vision20 November: Exchange of Views at the EP on Children Affected by the Syria Crisis
  11. Nordic Council of MinistersSustainable Growth the Nordic Way: Climate Solutions for a Sustainable Future
  12. EU2017EEHow Data Fuels Estonia's Economy

Latest News

  1. EU keeps former Soviet states at arm's length
  2. EU leaders make pledge on social issues after populist backlash
  3. EU agencies and eastern neighbours This WEEK
  4. Germany slams Dutch call for more ambitious EU climate goal
  5. Mind the gap: inequality in our cities
  6. Climate activists 'disappointed' with EU at climate talks
  7. Davis outlines UK vision on Brexit in Berlin
  8. German coalition talks in near collapse