Ten European countries that favour the imposition of a financial transactions tax (FTT) have received approval to push the issue forward, the European Commission (EC) said today.
The EC said that 10 countries (including Germany, France, Italy and Spain) are prepared to adopt a financial transaction tax, and that they should be allowed to do so because they’ve met all the legal conditions for such a move. The proposal still has to be adopted by a majority of European member states, and receive the consent from its parliament, in order for the 10 countries to move forward.
It also ruled that a common tax in 10 participating countries would: reinforce the single market, by reducing the complexities and competitive distortions that arise from a patchwork of different national approaches; firms will also benefit from reduced compliance costs and greater legal certainty; the tax will ensure a fairer contribution to public finances from the financial sector; and, it would make financial markets more efficient, “by steering them away from casino-type trading to more stable activities which support the real economy.”
Later in the year, the Commission intends to table the substantive proposal on the harmonised FTT, for discussion, which it says will be very much along the lines of the original FTT that was first recommended back in September 2011. It estimates that the harmonised tax would deliver €57 billion in revenues each year, and contribute to more responsible trading and enable a coherent approach to taxing this sector in Europe.
“I am delighted to see that 10 member states have indicated their willingness to participate in a common FTT along the lines of the Commission’s original proposal. This tax can raise billions of euros of much-needed revenue for member states in these difficult times. This is about fairness: we need to ensure the costs of the crisis are shared by the financial sector instead of shouldered by ordinary citizens,” said EC president, José Manuel Durão Barroso.