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Group Of EU Countries Agree On Transaction Tax From 2016, Critics Say Plan Is Vague

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• published: 06 May 2014
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France and Germany lead a group of EU countries to agree on implementing a tax on financial transactions by 2016, but critics of the levy say the plan is vague. Full story: France and Germany led a group of countries on Tuesday (May 6) in calling for a tax on financial trading, but their failure to agree central elements of the plan means it will fall far short of its original ambitions. The tax was promised in 2011 by German Chancellor Angela Merkel and then French President Nicolas Sarkozy as a means of getting banks to contribute more towards solving a crisis that had by then bankrupted Greece and Ireland. Finance ministers from ten euro zone states made a further pledge on Tuesday to phase in the tax on the trading of shares and some derivatives from January 2016, two years later than the original start date. "Today, the participating Member States have reiterated their commitment to the FTT and laid down their roadmap for its implementation. This is a welcome signal. Of course, there is still quite a road to travel before the FTT is in place. The participating Member States need to continue to invest wholeheartedly in this file to make it law within the timeframe foreseen. It is true that the plan and pace are less ambitious than the Commission had proposed. But, every step forward on the Financial Transaction Tax is of significance," said Algirdas Semeta EU Commissioner for Taxation and Customs Union. French Finance Minister Michel Sapin hailed the pact as evidence that Europe was able to respond to the crisis, saying the levy would raise roughly 6 billion euros ($8 billion) annually from taxes on shares alone. This is nonetheless a fraction of the 35 billion euros originally expected. "The agreement of this morning is important. It's an agreement that will function as a timeline. We no longer talk about it without acting, a tax as a nice idea but that will never become a reality. It is now in the process of becoming real. The tax will be implemented according to the timeline. On the first of January 2016, the tax on financial transactions will be put in place in the ten countries that have decided to act together. And these are not small countries. It is Germany, France, Italy, Belgium, Portugal and others," said Sapin. His German counterpart Wolfgang Schaeuble also praised the proposal put forward by the ten countries. Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia and Spain all signed Tuesday's statement, underscoring their commitment to the phasing in of the tax. "I think with this step, the reactions today also said this, the problem has not been solved, but it is again a step forward," said Schaeuble. The tax resurrects an idea first conceived by U.S. economist James Tobin more than 40 years ago. Its supporters view it as symbolically important in showing that politicians, many of whom have been accused of fumbling their way through the crisis, were tackling the banks blamed for causing it. "We did not get any detail, but, from the information we have, we are quite happy to let the group who want to implement the tax go ahead and implement it for their countries," said Irish Finance Minister Michael Noonan. However, the alliance of countries, in favour of the levy, left unanswered crucial questions such as how high the tax - opposed by a second group of European states including finance industry heavyweight Britain - should be and how it will be charged. "I think the first thing these countries should do is get serious and tell us what they really want, or take it off the table. This is taking too long and I think they want to give off the signal that they are serious, but they are not fully telling us what it would look like," said Dutch Finance Minister Jeroen Dijsselbloem A fragile alliance may too threaten to see the tax fall short of what was pledged at the height of the financial crisis. Slovenia, which also supports the project but whose government has collapsed, was unable to sign. European Union law requires nine countries to take part in order for the scheme to proceed. For more news and videos visit ☛ http://ntdtv.org Follow us on Twitter ☛ http://twitter.com/NTDTelevision Add us on Facebook ☛ http://on.fb.me/s5KV2C