Wednesday

25th May 2016

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.

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.

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.

News in Brief

  1. Technical witness tells EP diesel cheating not necessary
  2. Poland presents 'solutions' to constitutional crisis
  3. Greek bailout without IMF not an option, says Dijsselbloem
  4. Germany's Bayer makes offer to buy US giant Monsanto
  5. Greece evacuates Idomeni migrant camp
  6. Austria: far-right candidate defeated
  7. EU boosts Mediterranean naval campaign
  8. Greece to evacuate Idomeni migrant camp

Stakeholders' Highlights

  1. Swedish EnterprisesNew rules for posted workers - Better Protection or the End of Posting ?
  2. Innovators Under 35Meet MIT Technology Review's Innovators Under 35 Award Recipients from Belgium on 25 May, 6pm
  3. Open EuropeJoin the Brussels Brexit Debate on Wednesday, 25 May at 5:00 PM
  4. World VisionWhy The EU Needs to Put Children at the Centre of Emergencies - In Their Words
  5. ACCASustainability Reporting in Danger of Losing Its Momentum Says ACCA and CDSB
  6. CEDEC - Covenant of MayorsWebinar on 25 May - Electric Vehicles Development: The Role of Local Entities
  7. Dialogue PlatformDiversity as Heritage of Humanity! Join the “Colors of the World“ Show at the EP
  8. Centre Maurits CoppietersNew Responses to the Basque Peace Process? MEP Juaristi on Stateless Challenges Conference
  9. European Healthy Lifestyle AllianceImproving Cardiovascular Health Begins by Closing the Gap in Sex Disparities
  10. IPHRBrussels Talks to Take Stock of Human Rights in Turkmenistan
  11. World VisionCash-based Programming to Address Hunger in South Sudan:
  12. Belgrade Security ForumOpen Call for Applications! Join the Events Team at the 6th Belgrade Security Forum.

Latest News

  1. Austria vote is wake-up call for EU left
  2. Poland vows solution to judicial crisis
  3. Terrorists likely stockpiling explosives in EU, says Europol
  4. EU navies to help Libya coastguard stop migrants
  5. Merkel casts doubt on Turkey visa-free travel
  6. EU and Poland in last minute talks on rule of law
  7. Tough challenges ahead for Austria's president
  8. Search for VW compensation larger in EU than in US