France and Germany revive plan to tax financial markets
France and Germany are bidding to revive a controversial financial transactions tax (FTT), seeking support from the European Commission and enough EU partners to start the tax in a core group.
German Finance Minister Wolfgang Schaeuble and French counterpart Pierre Moscovici wrote to European Taxation Commissioner Algirdas Semeta and their EU colleagues seeking permission for an “enhanced cooperation” accord which could be implemented if one third of all EU states back it.
The two ministers said in their letters, undated according to copies seen by AFP on Friday, that their governments “request” that the Commission formally ask the 27 EU member states for “a decision authorising enhanced cooperation with regard to the creation of a common system of financial transaction tax.”
A bid by the Commission to introduce such a tax — aimed at curbing the market excesses that led to the 2008 global financial crisis — in all 27 EU states failed in June, in part due to British concerns over the City of London’s future.
Under its provisions, a tax of 0.1 percent would have been levied on share and bond trades, and 0.01 percent on other transactions, generating billions of euros in revenue according to the Commission.
France and Germany hope a FTT can be operational by the end of this year based on the support of nine states, but first they will need a positive vote by qualified majority, which means they need backing from London and other opponents who would not be joining in.
If they don’t get it through before the end of June next year, they will need to find a 10th state to back them, because Croatia will become the EU’s 28th member on July 1.
The European Parliament, an easier prospect, will also have to give its seal of approval.
The European Commission said it welcomed the French and German initiative “as a means of keeping up the momentum behind an EU FTT.”
“We believe that that the FTT has huge benefits to offer, even if applied by a limited group of member states,” said Emer Traynor, a spokeswoman for Semeta.
“We therefore urge the other interested … states to send their letters of request to reach this quota.
“Citizens are waiting for this tax, so the sooner it can progress, the better,” Traynor added.