Sunday

26th Feb 2017

Commission: 'Robin Hood' tax would save EU countries billions

  • The parliament will play a stronger role in the budget negotiations (Photo: European Parliament)

Member states will pay 50 percent less into the general EU budget by 2020 if they agree to implement a financial transactions tax (FTT), the EU commission said Thursday (22 March).

In a last-ditch attempt to undermine government opposition to both this specific 'Robin Hood' levy and the general idea of Brussels raising taxes, EU budget commissioner Janusz Lewandowski put some concrete savings figures on the table.

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By the commission's estimate, Germany would pay €10.7 billion less to the EU budget by 2020, Poland €1.8 billion, Italy €6.4 billion and Latvia €81 million. The UK, the Netherlands and Sweden - the strongest opponents of the FTT - would save €7.6bn, €2.6bn and €1.6bn respectively.

By 2020, total savings would amount to €81 billion.

Of this money - raised through a 0.1 percent tax on stock and bond trades and 0.01 percent on derivatives - one third would go to national budgets and two thirds (€54 billion) to the EU budget.

The transaction tax was core to the commission proposal for the next multi-annual budget (2014-2020) unveiled in June last year. Member states reacted negatively both to the five percent increase in the total budget and to the transaction tax

But Brussels is banking on Thursday's proposal winning over the unconvinced.

EU commission President Jose Manuel Barroso said that when member states see in "concrete terms" the savings that can be made "some who have been sceptical will probably change their position."

Lewandowski, for his part, said there has been a "change" in member states' thinking on Brussels raising taxes. Previous such suggestions had survived for "about one week" but the current proposal has been on the table since June 2011.

"We are coming with some striking figures to assist the debate," he added.

But the sums did not please all. The UK was quick to release a statement saying it "completely refute(s) the suggestion" that it would benefit from an EU transactions tax.

With the budget to be agreed by the end of the year, the overall debate is beginning to heat up.

A group of nine member states has said it wants to press ahead with the FTT on its own (which would remove it from the commission's grasp) while Germany and the UK and others have said the budget should not increase beyond inflation.

But the budget negotiations contain an extra twist. The European Parliament will play a stronger role.

MEPs are keen on the financial transaction tax, keen on supporting growth policies and keen on spending more. Last year, the parliament approved a report calling for a 5 percent increase in the next multi-annual fund.

Parliament chief Martin Schulz indicated his institution will play tough on the negotiation. The EU assembly "will not accept" a smaller budget, he said on Thursday.

He reminded listeners at a budget conference that parliament will "defend its co-decision rights." Any attempt by finance ministers to undermine this right "won't work with us," he said.

The article was amended on Friday, 23 March, to say that the European Parliament will play a bigger role in the budget negotiations. The previous version wrongly implied that the parliament has not in the past used a veto on the EU budget.

Greece and creditors break bailout deadlock

Athens agreed on budget cuts worth up to €3.6 billion and extracted some concessions from creditors, but the IMF warned the package might not be enough.

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