Copenhagen, 10/01/2012 (Agence Europe) - Danish Economy and Interior Minister Margrethe Vestager, who will be chairing the first ECOFIN Council this year on 24 January, rejected the current draft plan for a financial transactions tax on Tuesday, saying that the plans unveiled by the European Commission in September were not very convincing and the Commission's own research had shown that an FTT in Europe alone could cost 0.5% of GDP and cost hundreds of thousands of jobs due to banks and other financial bodies jumping ship and leaving the EU. Danish parliamentarian Lene Espersen of the Danish Conservative Party said it could cost more than 400,000 jobs.
Vestager said that everyone says that the priority right now should be to create jobs and therefore she is very reluctant to support an idea that would have the opposite effect, causing a reduction in economic growth and serious job losses.
She said that a unanimous vote would be required to bring in such a tax and this would be difficult to achieve due to the differences of opinion among member states. France and Germany want a Tobin Tax on financial transactions, but countries like the United Kingdom oppose the idea.
Vestager wants the focus to be on the current reforms of banking, for which further proposals were required in order to make further progress. More and higher quality capital reserves, basically, and greater cash flow - these were the issues to be tackled and they would lead to much better financial sector regulation, she added.
On Monday 9 January 2012, German Chancellor Angela Merkel, supported French President Nicolas Sarkozy's idea of introducing an FTT in the EU very rapidly or, failing that, in the eurozone alone. The Commission's proposal, which works on the basis of a 0.1% tax on shares and bonds and 0.01% on other financial products (derivatives, unit trusts and the like) could net some €55 billion a year. (CG/transl.fl)