It was, at the end of the day, a fairly modest breakthrough, but far more than we have been used to: the conclusions of the working groups set in place in June were enough to convince the ten member states participating in the enhanced cooperation on the financial transactions tax (FTT) to lift their first wave of misgivings.
In June this year, two working groups were tasked with looking at, firstly, the impact of the future tax on government debt and, secondly, the cost of collecting this tax in relation to the revenue generated.
The conclusions were presented to the finance ministers on Monday evening. All of them subscribe to the principles that will constitute the core of the tax, announced European Commissioner for Taxation Pierre Moscovici and French Finance Minister Michel Sapin.
It has been decided that the services of the Commission and the ten participating countries will start to draft a legal text, in hope of an agreement for December.
The tax will be levied on the shares of the ten participating states initially. The activities of market-makers will be taxed at a level of just 80% of the normal FTT rate (for shares).
As regards the scope of derivative products, swaps and futures will be taxed. Belgium opposed this, due to the possible impact on the cost of its government debt, as these products are used by investors to cover themselves against risk when investing in government debt. However, Belgium finally came to the view that the impact on its debt would be acceptable.
A number of derivatives will be exempted ('repo' and repurchase activities and the transactions of debt management agencies), but all other activities will be taxed. To begin with, derivative products based directly on public debt will be exempted.
Moscovici said that the participants had never been closer to an agreement, but that they are not yet there. The question of the rates and the allocation of the revenue have still to be discussed. France is calling for the income to be earmarked for development and the fight against climate change.
The question of the impact on pension funds and the real economy, further grounds for Belgian concern, have still to be looked into. (Original version in French by Élodie Lamer)