Saturday

23rd Sep 2017

EU commission tables financial tax for 11 states

  • Details of the proposal - such as where the revenue will go - remain unclear (Photo: ansik)

The EU commission on Tuesday (24 October) proposed that a group of 11 countries move ahead with a common financial transactions tax, after years of wrangling failed to produce a deal among all member states.

Estonia late on Tuesday joined an earlier group of 10 - Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain - willing to go ahead with the tax.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  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.

The proposal still needs the approval of a majority of the EU's 27 countries and the European Parliament, after which a joint legal text will be issued.

EU tax commissioner Algirdas Semeta said this will be "the epitome of a fair tax," raising "billions" of euros while helping to curb the "casino-type trading" that caused the 2008 financial crisis.

The roots of the idea go as far back as 1972 when Nobel laureate James Tobin proposed a tax on currency speculations.

Some countries have in the meantime introduced one form or another of taxation on financial services, but the idea for an EU-wide tax failed to gather the support of Britain, Sweden, Malta, Ireland and Luxembourg as well as other states which are wary that in the absence of a worldwide tax, financial businesses will move elsewhere.

Semeta said that even if it is applied among just 11 countries the tax will "replace a patchwork of different national approaches" making it easier for operators throughout the EU.

What will be done with the revenues is so far unclear.

One idea is to have it help finance a eurozone-only budget (all 11 countries are euro members) which should cushion the impact of austerity measures in places like Spain and Greece.

Development NGOs say the money should go to poorer regions in the world, allowing member states to deliver on humanitarian commitments.

"This tax can raise billions of euros of much-needed revenue for member states in these difficult times," commission chief Jose Manuel Barroso said, without specifying how it should be used.

The details on the level of the tax are not clear either.

An EU-wide proposal that was binned earlier this year suggested a 0.1 percent tax on regular trades and 0.01 percent on derivatives, including the automated speculative trading that goes on in milliseconds upon slight variations in the markets.

Back then, the EU-wide tax was estimated to bring in €57 billion a year.

EU takes time to ponder tech giant tax

The EU commission published a paper that outlined several options on how to increase tax income from internet companies' activities, but fell short of proposing legislation.

EU commission changes gear on trade

The EU executive seeks new deals with Australia and New Zealand, while aiming to overhaul the global investment protection system. It also wants to screen foreign investments.

Investigation

EU bank accused of muzzling watchdog

An ongoing review of the the European Investment Bank's "complaints mechanism" could make the oversight branch less independent and less effective.

News in Brief

  1. Dutch state appeals ban on taking air-polluting measures
  2. May proposes 2-year transition period after Brexit
  3. May to call on EU's 'sense of responsibility'
  4. Catalonia has 'contingency plans' for independence vote
  5. Last German polls confirm Merkel's lead
  6. EU to step up sanctions on North Korea
  7. Tusk calls 'euro summit' in December
  8. Report: May to seek two-year EU transition

Stakeholders' Highlights

  1. EU2017EEEU Finance Ministers Agreed to Develop New Digital Taxation Rules
  2. Mission of China to the EUGermany Stands Ready to Deepen Cooperation With China
  3. World VisionFirst Ever Young People Consultation to Discuss the Much Needed Peace in Europe
  4. European Jewish CongressGermany First Country to Adopt Working Definition of Antisemitism
  5. EU2017EEFour Tax Initiatives to Modernise the EU's Tax System
  6. Dialogue PlatformResponsibility in Practice: Gulen & Islamic Thought
  7. Counter BalanceHuman Rights Concerns Over EIB Loan to the Trans Anatolian Pipeline Project
  8. Mission of China to the EUChina Leads the Global Clean Energy Transition
  9. CES - Silicones EuropeFrom Baking Moulds to Oven Mitts, Silicones Are a Key Ingredient in Kitchens
  10. Martens CentreFor a New Europeanism: How to Put the Motto "Unity in Diversity" Into Practice
  11. Access MBAGet Ahead With an MBA Degree. Top MBA Event in Brussels
  12. Idealist QuarterlyIdealist Quarterly Event: Building Fearless Democracies With Gerald Hensel