Germany Spearheads “Robin Hood Tax” Group of EU Nations
At least nine countries led by Germany are expected to ask the European Commission to draw up plans for a so-called “enhanced co-operation” on the financial transactions tax (FTT) following a meeting of EU finance minister in Luxembourg on Friday (22 June).
BACKGROUND: A financial transactions tax (FTT) is one of many proposals made to tax the financial sector and hinder market speculation. Many countries have already implemented a levy on banks’ assets and liabilities.
The European Commission and the International Monetary Fund have also examined the possibility of a financial activities tax which would place levies on profits and bonuses.
In a bid to lower national contributions to the EU budget, the European Commission proposed to tap into an FTT. The UK is the staunchest opponent of the tax, arguing that the move will encourage financial operators to route their business through tax havens.
In May the European Parliament supported the Commission proposal.
Finance ministers took the decision after their Austrian colleague Maria Fekter told them that Vienna’s support for the EU’s permanent bailout fund – the European Stability Mechanism (ESM) – depended on progress on the FTT.
“If I do not get this [enhanced] co-operation, then the ESM will not be ratified and this would really be a pity,” Fekter told the ministers.
At least nine member states must indicate that they want to proceed with an enhanced co-operation and a qualified majority of all 27 member states have to agree to the procedure, which has been used only twice before – on cross-border divorce rules and on a common patent scheme.
If the procedure goes through, these countries will go their separate ways and implement the tax without the other EU countries on board.