Belgium warns of problems with plans for EU financial tax

Belgium has problems with a controversial tax on financial transactions being negotiated by 10 EU countries, Finance Minister Johan Van Overtveldt said Saturday, while denying reports that his country was about to withdraw from the project.

Supporters of the new tax have argued that it will promote responsible behaviour in the financial sector, which many see as the source of recent economic crises. But critics have said that it could increase the cost of capital and drive investment away from Europe.

"Belgium will not leave the negotiating table at this point, but we cannot deny that the draft texts that exist today are unacceptable, because they contradict the [Belgian] government agreement," Van Overtveldt was quoted as saying by the Belga news agency.

Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain had at one point planned to start implementing the tax in 2016, but that timetable has slipped, with nearly three years of negotiations failing so far to deliver a deal.

Estonia last month withdrew from the scheme, reportedly because it was not on board with a decision to restrict the levy to shares and derivatives from the participating countries.

Belgium, for its part, has concerns that the tax as currently envisaged does not sufficiently protect the real economy, could apply to pension funds and would increase the cost of financing public debt, Belga wrote.

The proposal currently on the table is also a source of "risks for the financial sector in Belgium," it quoted Van Overtveldt as saying.

The idea of introducing a financial transaction tax failed to find support among all of the EU's 28 member states, leading the 11 countries in favour to use a go-it-alone approach known as enhanced cooperation.

Britain has been one of the staunchest opponents of the scheme, fearing that it could harm the interests of London's financial hub.

Last update: Fri, 24/06/2016 - 08:49
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