Upon his arrival at the Ecofin Council meeting on Tuesday 21 January, Austrian Finance Minister Gernot Blümel announced that he was unable to support the German proposal for a Financial Transaction Tax (FTT) presented in December 2019.
"We need a new proposal. If this is not the case, Austria will have to leave the group (enhanced cooperation, editor's note)", he said. Mr Blümel, who spoke to his German counterpart, Olaf Scholz, on Monday, told him that the German proposal, which was too far removed from the European Commission's initial ambitions, was indeed not acceptable to Austria.
The German text (see EUROPE 12387/19) maintains a model inspired by the French financial transaction tax, whose rate is set at 0.2% and which is mainly due on purchases and sales of shares in listed companies with a market capitalisation of more than EUR 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).
At a press conference, Olaf Scholz indicated that many countries supported the proposal.
If all the other member states participating in the enhanced cooperation - namely France, Belgium, Portugal, Slovenia, Greece, Spain, Italy and Slovakia - validated the text, while remaining in the group, Austria would block discussions, one source explained. The country is not saying 'no' to the discussions; it is saying 'no' to this proposal and wants a new text that is broader and does not penalise small investors, it explained.
On the same day, the organisation BETTER FINANCE also attacked the German proposal, which it said "disproportionately targets EU citizens rather than financial institutions".
In a release, the organisation asks: - the explicit exclusion of non-professional individual investors from the scope of the tax; - the removal of the exemption for the foreign exchange (forex) market ; - the inclusion of all High Frequency Trades and Over-The-Counter (OTC) transactions in the scope of the tax.
BETTER FINANCE also believes that in order to avoid regulatory arbitrage and tax evasion, the FTT should apply in all EU Member States. (Original version in French by Marion Fontana with Agathe Cherki)