Thursday

22nd Oct 2020

Trichet puts dampener on financial transaction tax

  • Jean-Claude Trichet says any financial tax must be implemented on a global scale (Photo: Swedish Presidency)

European Central Bank President Jean-Claude Trichet has said a financial transaction tax could only work if implemented across the globe, marking a setback for others who have argued that Europe could go it alone.

Speaking after an informal meeting of EU finance ministers discussed the issue in Brussels on Friday (1 October), Mr Trichet said anything short of a complete worldwide roll-out would result in transactions simply being carried out in different jurisdictions.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"The financial transaction taxation presents a number of disadvantages economically, financially, in terms of technical implementation and there is of course an element, which is extremely important: It has to be implemented, if decided, absolutely everywhere in the world," said the respected French banker.

"Otherwise it only translates in displacing transactions out of those who introduce this, so I insist on that," he added.

The remarks will come as a disappointment to others who say Europe should not be held captive by the reluctance of other countries to move forward with the idea, most noticeably the United States.

Belgian finance minister Didier Reynders, whose country currently holds the EU's six-month rotating presidency, recently raised the possibility of a eurozone-only financial transaction tax, saying the 16-country bloc should push ahead if a deal amongst the full EU-27 proved impossible.

Supporters say even a minuscule tax on each financial transaction could help raise billions of euros for the fight against poverty and climate change, amongst other recipients.

The Green group in the European Parliament recently produced a paper on the subject, saying a tax rate of just 0.05 percent could generate up to €190 billion per year if introduced at the EU level, or up to €98 billion if restricted just to the eurozone. The parliament's Socialist and hard left groups also support the initiative.

Speaking after the finance minister meeting, Mr Reynders said he would continue to push for the tax in the G20 forum.

French President Nicolas Sarkozy recently won plaudits from the NGO community when he called for the world to introduce the tax at a UN summit in New York, with France and Germany the leading advocates for the measure within the EU.

Britain is at the forefront of opposition within the bloc, citing concerns akin to those expressed by Mr Trichet on Friday. Sweden - which introduced a similar tax in the 1980s before later scrapping it - is also opposed.

The concept was originally dreamed up by US Nobel Laureate economist James Tobin in the early 1970s, and was initially devised as a tax on currency trading as a means of reducing volatility.

Germany asks capitals to give a little in EU budget impasse

European Parliament negotiators are demanding €39bn in new funding for EU programmes such as Horizon research and Erasmus, in talks with the German EU presidency on the budget. Meanwhile, rule-of-law enforcement negotiations have only just begun.

EU budget talks suspended in fight for new funds

MEPs are requesting additional, new funding of €39bn for 15 EU programs. The German presidency argues that budget ceilings, agreed by EU leaders at a marathon summit in July, will be impossible to change without a new leaders' meeting.

EU countries stuck on rule of law-budget link

Divisions among EU governments remain between those who want to suspend EU funds if rule of law is not respected, and those who want to narrow down conditionality.

MEPs warn of 'significant gaps' in budget talks

The budget committee chair said the European Parliament expects tangible improvements to the package in its talks with member states - while the German minister argued that the EU leaders' deal was difficult enough.

Top EU officials urge MEPs give quick budget-deal approval

MEPs criticised the EU deal on the budget and recovery package clinched by leaders after five days of gruelling talks, saying it is not enough "future-oriented", and cuts too deeply into EU policies, including health, innovation, defence and humanitarian aid

News in Brief

  1. Commission to press Croatia on migrant 'abuse' at border
  2. Belarus opposition awarded 2020 Sakharov Prize
  3. Belgium's foreign minister in intensive care for Covid-19
  4. MEPs restrict CAP funding for bullfighting
  5. Coronavirus: Liège is 'the Lombardy of the second wave'
  6. UK to keep out EU nationals with criminal past
  7. Report: EU to restrict travel from Canada, Tunisia, Georgia
  8. Pope Francis supports same-sex civil unions

EU countries stuck on rule of law-budget link

Divisions among EU governments remain between those who want to suspend EU funds if rule of law is not respected, and those who want to narrow down conditionality.

Stakeholders' Highlights

  1. UNESDAMaking healthier diets the easy choice
  2. Nordic Council of MinistersUN Secretary General to meet with Nordic Council on COVID-19
  3. UNESDAWell-designed Deposit Return Schemes can help reach Single-Use Plastics Directive targets
  4. Nordic Council of MinistersNordic Council meets Belarusian opposition leader Svetlana Tichanovskaja
  5. Nordic Council of MinistersNordic Region to invest DKK 250 million in green digitalised business sector
  6. UNESDAReducing packaging waste – a huge opportunity for circularity

Latest News

  1. Nato and EU silent on Turkey, despite Armenia's appeal
  2. EU tells UK to decide on Brexit as deal 'within reach'
  3. EU farming deal attacked by Green groups
  4. France vows tough retaliation for teacher's murder
  5. All eyes on EU court for decision on religious slaughter
  6. 'Big majority' of citizens want EU funds linked to rule of law
  7. EU declares war on Malta and Cyprus passport sales
  8. EU Commission's Libya stance undercut by internal report

Join EUobserver

Support quality EU news

Join us