Macron relaunches financial transaction tax project, including the UK

Macron delivers a speech on the European Union at the amphitheater of the Sorbonne University in Paris, France, 26 September. [Ludovic Marin/EPA]

French President Emmanuel Macron promised to allocate all future earnings of a financial transaction tax to European solidarity. But with Brexit in mind, it may be too ambitious to relaunch the project with all 28 member states. EURACTIV France reports.

The French president wants to put the financial transaction tax (FTT) back on the European agenda. Started in 2011, the project has been debated among 10 countries since 2013 but there has been no consensus.

“There are two countries in Europe that have an FTT, the UK and France. I propose that all 28 countries adopt one or the other,” Macron said during his speech in Paris on Tuesday (26 September).

The idea of a common FTT for all 28 countries, despite Brexit, would make it possible to raise significant financial resources, which Macron proposes to spend entirely on “European public aid”.

The allocation of revenues to international solidarity is an old campaign from civil society organisation. France already assigns 50% of its FTT to development aid.

“This announcement is a really positive signal for our European and African partners. Relaunching this project as a tool for international solidarity would give credence to a forward-looking Europe,” said Friederike Röder, director of NGO ONE in France.

Too ambitious?

But Macron’s FTT promises could easily crash against European realpolitik.

On the table since 2011, the FTT dossier was initially proposed by the Commission but was halted due to a lack of consensus among the 28 member states.

Belgium told to get off the fence, stop blocking FTT

EU finance ministers have presented a compromise text for the Financial Transaction Tax (FTT) and urged Slovakia and Belgium, which is accused of deliberately blocking negotiations, to ratify it. EURACTIV France reports.

Fiscal issues need consensus from all member states. The initial project was downscaled to an enhanced cooperation project that allows a minimum of nine member states to progress on a common subject.

But even in this lighter form, the FTT has not yet been endorsed, due to technical barriers to its implementation.

Repeatedly pushed back on the agenda since 2015, the debate on the FTT has started afresh among 10 EU finance ministers during a negotiation held in Tallinn on 16 September.

“During the last meeting in Tallinn, the dossier continues to be debated. According to the information available to us, a shared proposal has been agreed since the ministers asked the Commission to write a draft law.

“What’s more, French Finance Minister Bruno Lemaire has asked for a study analysing the consequence of Brexit on the FTT project,” explained Antonio Gambini, a researcher at the national centre on cooperation and development in Belgium (CNDC).

“It would be easier to pursue negotiations with 10 member states, 28 is not realistic, it is a way to sink the project,” he added.

But the renewal of FTT and Macron’s helping hand could give the project wings to overcome the political impasse, according to Isabelle Thomas, a French socialist MEP (S&D).

“Anyhow, enhanced cooperation was dead. Proposing a project for all 28 member states may be a way to get out of the deadlock,” she said.

“But after the German elections, the political situation seems less inclined to FTT, given that Merkel’s future coalition will be leaning towards the right.”