Brussels gives approval to idea of placing small levy on trades – opening way for FTT for 10 eurozone countries
A group of 10 eurozone countries moved a step closer to introducing a financial transaction tax when Brussels gave its approval to the idea of placing a small levy on trades.
Europe's tax commissioner, Algirdas Semeta, removed one of the final obstacles to a so-called Tobin tax becoming a reality when he announced there were no legal obstacles to the proposal. "I am delighted to see that 10 member states have indicated their willingness to participate in a common FTT along the lines of the commission's original proposal," José Manuel Barroso, president of the European Union executive, said.
"This tax can raise billions of euros of much-needed revenue for member states in these difficult times. This is about fairness: we need to ensure the costs of the crisis are shared by the financial sector instead of shouldered by ordinary citizens."
Although the commission originally hoped all 27 EU members would adopt an FTT, opposition to the idea was spearheaded by Britain, Sweden and the Netherlands. The 10 countries that have agreed to take part are Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain. Estonia is likely to follow once its parliament has been consulted.
The plan will now have to be accepted, via a qualified or enhanced majority vote, by the EU's members and get the support of the European parliament. The commission is proposing that the FTT should be levied at 0.1% on shares and bonds, and 0.01% on derivatives.
David Hillman, spokesman for the Robin Hood Tax campaign, said: "We are delighted that the European FTT is moving from rhetoric to reality and will ensure banks pay for the damage they have caused.
"This shows it is possible to put the needs of the public over the profits of a privileged few. It's unforgivable in this age of austerity that the UK government is turning down billions in additional revenue to protect the City's elite."
Matthew Fell, the CBI's director for competitive markets, said: "The Government has made absolutely the right decision not to adopt the European FTT in the UK. At a time when we should be completely focused on growth this tax could have the opposite effect by increasing the cost of capital for businesses. It would also fall heavily on investors, including people saving for their future through pensions and other financial products."
The Association for Financial Markets in Europe, a lobby group for financial firms, said: "FTT is regrettable and likely to serve as another brake on economic growth. In light of the negative impact that a financial transaction tax would have on jobs and growth in Europe, it is disappointing that the proposal is still being considered."
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