Brussels, 28/03/2012 (Agence Europe) - In a letter to the Danish Presidency and the EU27 finance ministers, ahead of the economic and finance ministers' Council on 30-31 March which will be examining the plans for a financial transaction tax (FTT), the head of the Socialist Group at the European Parliament, Austria's Hannes Swoboda, calls for “swift and decisive action on the introduction of a financial transaction tax and the fight against tax fraud and tax evasion”, implicitly criticising the reservations of several EU governments and asking them to come up with “alternatives” to the ideas mooted by the European Commission (see below).
“Support for a financial transaction tax has been gathering over the past two years... It is now clear that opposition to an FTT is purely political and not based on scientific facts”, he claims in his letter, adding that “alternatives to the model proposed by the European Commission and supported by the European Parliament should be discussed with particular care, keeping in mind what the original purpose of the FTT is. As a matter of fact, if the aim of implementing an FTT is to tackle speculation, to make the financial sector pay its fair share and to raise significant revenue, an alternative to the FTT on shares only would certainly fail to meet these goals. The majority of revenue would in fact come from derivatives transactions and not from shares. Moreover, by taxing only shares, the tax would mainly be paid by households, insurance and pension funds, while the bulk of speculative activity would be left untouched.”
Swoboda commented that the views expressed on Saturday by the German finance minister, Wolfgang Schäuble, about the search for alternatives, equivalent where possible, to the Commission's plans for an FTT (see EUROPE 10582) were “irritating”, adding: “I do not understand why he is moving away from his position on the FTT.”
Since the weekend, however, the head of the Eurogroup, Luxembourg's prime minister and finance minister Jean-Claude Juncker, has discussed the growing reservations about the Commission's idea at a joint press conference with the former head of the European Central Bank, Jean-Claude Trichet, in Brussels on Tuesday 27 March. Juncker said he strongly backed the idea of getting the financial industry to be held more to account for the impact of the crisis, but wondered whether an FTT would be the right answer. Pointing out, like Schäuble, that the Commission's proposals did not have the backing of all European governments, even within the eurozone, he suggested looking for other ways of achieving the same aim. Trichet said that in order to be effective, an FTT would have to be introduced globally, which would be perfectly acceptable, but introducing such a tax in only one part of the world would amount to shooting oneself in the foot. (FG/transl.fl)