Ten EU countries move closer to contested financial tax

A group of EU member states could agree by the end of the year on a controversial tax on financial transactions, German Finance Minister Wolfgang Schaeuble said Tuesday, following repeated delays to the project.

Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain have been negotiating the tax for nearly three years. They had at one point planned to start implementing it this year.

Their finance ministers met Monday to evaluate technical progress made since June, when Austrian Finance Minister Hans Joerg Schelling had warned that they should aim for an agreement by September or else give up entirely.

But far from abandoning the project, the ministers made "very important progress," EU Economy Commissioner Pierre Moscovici said Tuesday in Luxembourg, where a meeting of all 28 EU finance ministers was taking place.

The countries pursuing the tax are now in agreement on the basics, Schaeuble later said. "By the end of the year we therefore want to have a decision, ideally a positive one," he added, noting that the tax could then be introduced by 2018 at the earliest.

Schaeuble said he expected at least nine of the countries to remain on board - the minimum needed for the levy to take effect in their countries.

Moscovici said his office would now prepare draft legislation, after the ministers agreed Monday on the "four important measures that will form the core engine of such a tax."

"Hopefully, in the weeks to come, we will be capable of submitting this draft to the ministers so that they can go to the finish line," the commissioner added. Many people "would like to see the financial sector contribute to the financing of some important public goods," he said.

"This tax on financial transactions is not made to punish," added French Finance Minister Michel Sapin, noting that it sought instead to prevent purely speculative transfers.

The idea of introducing a financial transaction tax in the European Union has long been controversial and could not find support among all 28 member states.

Supporters have argued that it will help make the financial sector - which many see as the source of recent economic crises - act more responsibly. But critics have said it could increase the cost of capital and drive investment away from Europe.

Sapin said that every effort was being made to ensure that the tax does not "handicap" Europe's financial centres, notably Frankfurt or Paris.

The 10 countries are using a go-it-alone EU approach known as enhanced cooperation.

Last update: Tue, 11/10/2016 - 18:13

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