Tuesday

4th Oct 2022

EU commission not giving up on finance tax

  • EU tax commissioner Semeta is not giving up on the financial transactions tax (Photo: consilium.europa.eu)

The European Commission has said it is not giving up on a planned financial transactions tax for 11 EU countries after a legal opinion said it was in breach of EU law.

"The European Commission is absolutely confident in the legality of the tax we have proposed. We reject any claims that it goes against the treaties or that it compromises the single market," EU tax commissioner Algirdas Semeta said on Saturday (14 September) after a meeting of EU finance ministers in Vilnius.

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Earlier this week, the legal service of the EU Council, representing member states, said the planned tax - to be adopted by 11 countries - would infringe the tax sovereignty of the other EU members and distort the single market.

In addition, the UK - which has a large stake in the global financial sector - has challenged the law at the European Court of Justice.

Semeta insisted that the court challenge had "nothing to do" with the legal opinion of the council.

"I appreciate the need of member states to be assured of this legal certainty when negotiating such an important proposal. We stand ready to answer any questions they may have and we'll continue to provide information needed to facilitate a compromise on the FTT," the commissioner said.

Under so-called enhanced co-operation, a third of the member states can push for joint legislation in the absence of an agreement at 28-level.

Germany, France, Italy, Spain, Austria, Portugal, Belgium, Estonia, Greece, Slovakia and Slovenia had subscribed to the tax, also called "Robin Hood tax."

Even though the law would apply to only 11 countries, all 28 member states are involved in negotiating the legal text, Semeta said.

"I believe that we will present arguments to our member states for the next meeting of the council working group. So the work is in progress and I do not see any reasons to stop this work or to make some additional reflections," he noted.

An EU official familiar with the talks told this website that the chances are very slim for the tax to ever come into force.

"There are too profound divergences among participating member states and the scope will not make it worth," the source said.

German finance minister Wolfgang Schaeuble on the margins of the Vilnius meeting said in his view the project "has not been dealt a death blow" but also admitted that enhanced cooperation "is not the easiest way" to get legislation passed in the EU.

Exclusive

EU officials were warned of risk over issuing financial warning

The European watchdog for systemic economic risk last week warned of "severe" threats to financial stability — but internal notes show top-level officials expressed "strong concerns" over the "timing" of such a warning, fearing publication could further destabilise financial markets.

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