Brussels, 09/09/2014 (Agence Europe) - The Finance Ministers of the countries taking part in enhanced cooperation on the financial transaction tax (Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia and Spain) will meet in Milan later this week, to try to move forward on a project which has become bogged down in technical considerations since the political statement they signed before the European elections, in May of this year (see EUROPE 11073). In this statement, ten (all except Slovenia) undertook to implement the FTT gradually from 2016, initially taxing shares and certain derivatives, without specifying which, pledging a viable solution before the end of this year.
The question of the derivatives to be taxed will be discussed at this meeting, in an attempt to remove the logjam. It is said that France is currently softening its stance on the idea of taxing equity derivatives. It is also reported to be putting maximum pressure on the Italian Presidency to move the work forward. A number of press reports indicate an imminent Franco-Italian proposal. The Italian Presidency, although contacted several times, was unavailable to confirm this report. A technical meeting will then be held on 25 September.
On Tuesday morning, the European Banking Federation (EBF) lamented the fact that the ministers still want to make headway with this project, as it feels that they have underestimated its economic impact. The EBF believes that, even though it is limited to a number of countries, the FTT would be harmful to the European economy as a whole. The tax would damage financial stability in Europe and in the eurozone at a time when the European economy needs better structures to encourage reforms, it states. Some observers have ironically pointed out that, in times of economic slump, it seems easier to raise taxes than to carry out reforms. Indeed, according to a study by the Danish institute Copenhagen Economics, unveiled on Monday by Germany, the FTT would bring in at least €17.6 billion a year. Within the industry, this figure is being taken with a pinch of salt. (EL)