Germany, France push for financial transactions tax

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Germany and France have appealed to the Belgian EU Presidency to discuss the introduction of a financial transactions tax in the EU at an informal meeting of finance ministers in Brussels, which kicks off today (12 July). 

In a joint letter, France and Germany's finance ministers, Christine Lagarde and Wolfgang Schäuble, reiterated their support for such a tax on an EU-wide scale in spite of staunch resistance to the measure at the last G20 summit of world leaders in Toronto (EURACTIV 28/06/10).

Addressing the Belgian EU Presidency, Schäuble and Lagarde indicated that they will jointly put forward a proposal at the informal talks to plug a European financial transactions tax (FTT).

"Although a consensus could not be reached yet, we are convinced that the European Union shall pursue its efforts towards the setting up of such a tax that is both feasible and necessary," the ministers added.  

EU diplomats speaking ahead of the talks said they expected the FTT to form part of their discussions.

Belgium has long been in favour of introducing a so-called 'Tobin Tax' – the 1970s precursor to an FTT – if other countries also were to show commitment to it.

In 2004, the Commission of Finance and Budget in the Belgian Federal Parliament approved a bill according to which Belgium will introduce the Tobin Tax once all countries in the eurozone have introduced similar laws. 

Finance ministers from the euro zone will meet today to discuss bank stress tests (EURACTIV 12/07/10) and their continuing debt problems.

They will be joined by the remaining ministers from the EU 27 tomorrow to discuss reform of financial supervision and draft policy to manage the bloc's debt problems and national budgets.

 

The idea of making banks and other financial institutions pay for failings in the sector is not new. A bank levy on banks' liabilities is foreseen to either bail out banks or plug national deficits, while a financial transaction tax (FTT) is envisaged for other purposes like financing the fight against climate change.

The Group of Twenty most industrialised countries worldwide (G20) has already called for a framework to prevent and cope with future financial crises on several occasions, with which the private sector would be actively involved.

EU Internal Market and Financial Services Commissioner Michel Barnier has made clear that he will not refrain from taking a tough stance against the private sector if necessary.

In May, the European Commission proposed that banks set up "preventive" funds, primarily financed from their liabilities and possibly their profits, based on the so-called 'polluter pays' principle (EURACTIV 26/05/10).

 

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