Brussels, 20/06/2012 (Agence Europe) - Should a financial transaction tax (FTT) be introduced in the EU27 or in some member states in the short or medium-term? If so, what form should it take? The form recommended by the European Commission in its draft directive or some other form (stamp duty, bank transfer or a tax on financial activity)? These questions will be dogging European finance ministers in their meeting in Luxembourg starting on Thursday (see separate article).
The ministers will discuss a progress report by the Danish Presidency on technical progress since their last meeting (in March 2012) on the two FTT options, the one recommended by the Commission, and other versions. They will discuss the possibility of introducing the tax initially on transactions other than derivatives deals (the Commission suggests a lower minimum rate for derivatives of 0.01%). There are discussions about this because each type of derivative raises different technical problems, which have not yet been investigated.
Above all, the talks will hinge on political, rather than technical, details and will reveal whether there are countries opposing the idea of introducing an FTT of any type in the EU, in which case the Danish Presidency would note that progress is not possible because this issue requires unanimous voting. However, in this case the countries that want to go ahead can use the enhanced cooperation mechanism if they wish. The Commission would be asked to draw up draft legislation to this effect if there is sufficient interest.
Countries' initial positions are clear. Countries like the United Kingdom and Sweden are bitterly opposed to the introduction of an FTT in the EU27, for different reasons, while Germany, France and Italy are pushing for as widespread a tax as possible. At the end of the G20 summit in Mexico on Tuesday, the French president, François Hollande, said that an FTT was very important for France and suggested it could be brought in next year, using enhanced cooperation in the EU if necessary. The Italian prime minister, Mario Monti, and the German chancellor, Angela Merkel, agree with him and the three leaders will be meeting in Rome on Friday 22 June, along with the Spanish prime minister, Mariano Rajoy, where they are expected to discuss the FTT tax.
The broad consensus on the tax in a number of countries and in public opinion is backed by four dozen leading bankers, including Arielle De Rothschild and William Barclay, who have urged world leaders to introduce an FTT, but to use the revenue to combat poverty around the world. (FG/transl.fl)