Monday

29th Aug 2016

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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

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.

Stakeholders' Highlights

  1. Nordic CouncilNordic-Baltic co-operation vital in turbulent times
  2. GoogleBrussels - home of beer, fries, chocolate and Google’s Public Policy Team - follow @GoogleBrussels
  3. HuaweiSeeds for the Future Programme to Bring Students from 50 countries to China for Much-Needed ICT Training
  4. EFASpain is not a democratic state. EFA expresses its solidarity to Arnaldo Otegi and EH Bildu
  5. UNICEFBoko Haram Violence in Lake Chad Region Leaves Children Displaced and Trapped
  6. HuaweiMaking Cities Smarter and Safer
  7. GoogleHow Google Makes Connections More Secure For Users
  8. EGBAThe EU Court of Justice Confirms the Application of Proportionality in Assessing Gambling Laws
  9. World VisionThe EU and Member States Must Not Use Overseas Aid for Promoting EU Interests
  10. Dialogue PlatformInterview: "There is a witch hunt against the Gulen Movement in Turkey"
  11. ACCAACCA Calls for ‘Future Looking’ Integrated Reporting Culture With IIRC and IAAER
  12. EURidNominate Your Favourite .eu or .ею Website for the .EU Web Awards 2016 Today!