Brussels, 09/12/2014 (Agence Europe) - Having missed the December 2014 deadline, the best the eleven countries involved in the enhanced cooperation mechanism to introduce a financial transactions tax (FTT) could do was to repeat their commitment to work hard to reach agreement early in 2015 on the first application of the tax.
On behalf of the Italian Presidency, Italy's finance minister Pier Carlo Padoan encouraged Latvia “to continue working on this issue in 2015”. On behalf of the eleven FTT nations, French finance minister Michel Sapin said that enhanced cooperation would work on an agreement for early 2015.
This show of optimism was replaced during the day by the participants blaming each other for the delays in the project, particularly in terms of defining which derivatives are to be included in the first application of the new tax. Some countries accuse France of only wanting a lowest common denominator tax, and France itself criticises Austria for going too far. Each country's financial sector focuses on a different financial product. While France wants to protect share derivatives, Germany reportedly wants to protect currency and interest derivatives. Although each country will need to accept to sacrifice some of its interest, none of them seem prepared to do so.
At a press conference, Sapin explained that a solution was needed that would avoid damaging any particular financial centre. The big member states recommend using the issuing principle as the basis for the tax, and residency for the division of income. But the small countries feel they would lose out from this and are not happy with the idea.
During the ECOFIN Council, Sapin repeated France's initial position - levying the FTT on all transactions in all countries. He told his colleagues that in practice, eleven countries working together was almost more complicated than twenty-eight and that the FTT would have been easier with twenty-eight, especially because that would have got round the danger of companies relocating.
No other countries spoke during the debate. On behalf of the Commission, Pierre Moscovici said that it was still perfectly possible to take the decisive step this year. Upon his arrival at the ECOFIN meeting, he stressed that he wanted a successful FTT and if it was possible to show that enhanced cooperation works then it would be possible to make progress on what he himself greatly hopes to see, namely fiscal harmonisation. At the press conference, Padoan refused to say whether 2016 was still a realistic timing for the FTT coming on stream, but Moscovici said he was truly convinced that the 1 January 2016 timetable was realistic and they needed to maintain that goal. (EL)