Wroc³aw, 19/09/2011 (Agence Europe) - It will be a long and winding road to the introduction of a tax on financial transactions in the European Union, despite the European Commission's determination to put forward draft legislation in the next few weeks, possibly on Wednesday 5 October. After the ECOFIN Council in Wroc³aw on Saturday 17 September, Polish Finance Minister Jacek Rostowski said the EU was very divided on whether such a tax should be introduced, especially if it were to be levied only in Europe.
EU Internal Market Commissioner Michel Barnier admitted that it would be problematic, but it was the European Commission's job to gather consensus on controversial issues. Convinced himself that a bank transaction tax makes sense, he said that it would be easy technically, productive financially, affordable economically and right politically. Barnier said the Commission would unveil draft legislation over the next few weeks and the tax would have wide application.
France and Germany are the main countries in favour of an FTT and have already submitted their ideas to the Commission to this effect (see EUROPE 10449). German Finance Minister Wolfgang Schäuble said he would be using his powers of persuasion once the draft legislation is published. Belgium also backs the idea and in Wroc³aw Belgian Finance Minister Didier Reynders said it might only be levied in the eurozone if it were not possible to get all 27 member states to agree. He said it would be helpful if the world's bankers and finance ministers discussed the matter at the G20 finance summit in Washington on 23 September. Attending the meeting in Poland (where he warned Europe about the risk of allowing the sovereign debt crisis spreading to the rest of the world economy), US Treasury Secretary Tim Geithner rejected the idea of an FTT.
There was so little enthusiasm for a financial transactions tax in Wroc³aw that the United Kingdom did not even express its opposition to the idea. Luxembourg warned of the risk of taking unilateral measures and how this could impact negatively on competitiveness in the European financial industry. The European Central Bank fears that an FTT would herald an exodus of financial dealing if it were only levied in the EU. (MB/transl.fl)