EU Countries Divided on Financial Transactions Tax

World | March 14, 2012, Wednesday // 14:32|  views

French President Nicolas Sarkozy has reiterated his country`s commitment to taxing financial transactions. Photo by BGNES

EU countries remain divided on the benefits of the financial transactions tax (FTT) despite the numerous discussions held on the matter.

A debate on Tuesday between the EU finance ministers further entrenched the long-standing positions of several countries, including Sweden and the UK's resistance and Germany's outright support, news portal EUobserver reported.

"We need a decision in the foreseeable future," said German minister Wolfgang Schaeuble, adding that the EU should continue to strive for agreement among all 27 member states.

The Czech Republic, Luxembourg, Malta, Sweden and the Netherlands reiterated their opposition to the tax in their Tuesday statements.

Dutch finance minister Jan Kees de Jager cited independent studies predicting a "very big shift" of businesses to other jurisdictions if such a tax is introduced.

His Swedish counterpart Anders Borg argued that it would be very difficult for Swedes to accept the FTT.

Austria's Maria Fekter, on the other hand, stressed the importance of counteracting the commonly-held belief that "markets are ruling us".

The EU finance ministers were unanimous in their opinion that the proposal of the European Commission from October 2011 had to be subjected to further analysis.

The technical discussions held on the matter brought up a number of questions, such as how the FTT would be collected and used, who would be liable to pay and what macroeconomic effects its introduction would entail.

Citing sources close to the matter, the news portal said that France wanted progress on the FTT issue before April.

French President Nicolas Sarkozy, who faces elections in April and May, emphasized the positive sides of the tax and vowed that the country would introduce its own version of it that would take effect in August.

In early February, a total of 9 countries, including France, Germany, Italy, Belgium, Austria, Portugal, Finland and Greece, sent a letter to Denmark in the beginning of February, urging for developments on the introduction of the FTT before the expiration of the term in office of the Danish EU presidency in end-June.

The nine countries would be sufficient in number to launch their own tax through a procedure provided in the Lisbon Treaty known as enhanced cooperation.

However, the procedure can only be started as a measure of last resort, after all options for getting unanimous support from the 27 Member States have been depleted.

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Tags: Nicolas Sarkozy, financial transactions tax, Lisbon Treaty, Wolfgang Schaeuble


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