Saturday

23rd Jun 2018

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.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... our join as a group

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.

Greece and creditors proclaim 'end of crisis'

After late-night talks, the Eurogroup agreed on a €15bn disbursement and debt relief measures for Greece, while setting out a tight monitoring when the bailout ends in August.

Greek bailout exit takes shape

At a meeting next week, eurozone finance ministers and the IMF are expected to agree on new cash, debt relief measures, and a monitoring mechanism to ensure that Greece can live without international aid for the first time since 2010.

Opinion

The risks behind the 'green bond' boom

The EU should not overuse the financial system in order to achieve environmental goals, or it risks the emergence of a green bond bubble which would be detrimental to the financial sector and hinder the achievement of climate targets.

Opinion

Eurozone needs institutional reform

Both the examples of Greece and Italy test the limits of a system with inherent weaknesses that feeds internal gaps, strengthens deficits and debts in the European South, and surpluses in the European North respectively.

News in Brief

  1. Venice Commission: Hungary should repeal NGO law
  2. Trump threatens to slap 20 percent tariff on EU cars
  3. EU closes deficit procedure against France
  4. Romania's ruling party leader gets jail sentence
  5. EU states defer individual decisions on asylum reforms
  6. Commission opens case on Qatar gas flow
  7. EU adopts posted workers directive
  8. EU leaders to call for 'coordinated plan' on AI

Stakeholders' Highlights

  1. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  2. Macedonian Human Rights MovementMHRMI Launches Lawsuits Against Individuals and Countries Involved in Changing Macedonia's Name
  3. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  4. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  5. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  6. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  7. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  8. Mission of China to the EUChina: Work Together for a Better Globalisation
  9. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  10. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  11. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  12. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network

Latest News

  1. Migration row at centre of EU summit This Week
  2. Merkel's woes cast shadow on EU's future
  3. Europe's tech race - trying to keep pace with US and China
  4. Merkel and Juncker's mini-summit risks fiasco
  5. Greece and creditors proclaim 'end of crisis'
  6. How a US firm pushed for EU €2.1trn pension fund
  7. Commission defends Africa migrant plan ahead of summit
  8. Bavaria hijacks EU migration talks

Join EUobserver

Support quality EU news

Join us