On Monday 9 December, German Finance Minister Olaf Scholz sent his European counterparts a proposal for a final text on the Financial Transaction Tax (FTT). The information, initially reported by the German newspaper Süddeutsche Zeitung, was confirmed on Tuesday 10 December, in a statement from the German Ministry of Finance.
The text maintains a model based on the French financial transaction tax, including the rate which is set at 0.2% and it is essentially due on the purchase and sale of shares of listed companies with a market capitalisation of more than €1 billion (see EUROPE 12261/6).
On the other hand, it excludes initial public offerings and leaves it to each participating country to decide whether or not private pension products will be taxed - a long-standing request from Belgium (see EUROPE 11729/13).
Germany hopes to obtain the approval of the other nine Member States participating in the enhanced cooperation, namely France, Belgium, Portugal, Austria, Slovenia, Greece, Spain, Italy and Slovakia, as soon as possible.
“I welcome Olaf Scholz's proposal on the financial transaction tax, which is the result of close collaboration with France, especially on the principle of mutualisation (see EUROPE 12278/17)”, commented French Finance Minister Bruno Le Maire in a reaction sent to EUROPE on Tuesday.
“We will examine the text in detail to ensure that the final agreement is as ambitious as the French tax already in place” he said, adding: “nonetheless it is a good basis for closing this case as soon as possible”.
German MEP Sven Giegold (Greens/EFA) criticised the proposal, saying that “what Scholz has presented does not deserve the name Financial Transaction Tax”.
In a statement issued on Tuesday, he explained that the tax proposal, which does not apply to transactions for bonds and derivatives, needs a broader tax base in order to generate significant income. According to him, a “real” FTT would generate about ten times more revenue than the proposal currently on the table.
However, an informal agreement between the ten countries would only be a preliminary step in the legislative process. The ECOFIN Council has repeatedly reiterated (see EUROPE 12330/20) that any formal decision should be preceded by a debate between all EU Member States and according to the required procedural steps. (Original version in French by Marion Fontana)