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EU ministers debate finance tax

European Union finance ministers are debating a tax on financial transactions which could raise money for the EU and make banks share bailout burdens with taxpayers.

The tax would take a tiny fraction from a wide range of financial dealings and the EU wants to use the money to relieve states' membership contributions to the institution.

It could also help repay governments for some of the billions of euros in taxpayer money that they had to pour into banks which needed to be bailed out during the 2007-2009 financial crisis because they had made risky investments that went sour. Some also argue it could reduce volatility on financial markets.

The EU has been pushing the idea since it came up during global summits held in 2009 to combat the financial crisis.

France and Germany support the plan but Britain is opposed because London is a major financial centre. The US also opposes such a tax, and many say it will not work unless imposed globally because banks will simply move transactions to jurisdictions where there is no tax.

Belgian finance minister Didier Reynders said ahead of Saturday's meeting of finance ministers in Wroclaw, Poland, that if a tax cannot be imposed in all 27 EU member countries, then it could be discussed for the 17 which use the euro. That group does not include Britain.

"We are having a discussion about stabilisation in the eurozone and the world, and I am sure we need to put on the table the financial transaction tax," he said. "It's important not only to finance the budget but to stabilise the flows on the capital markets.

"Yes, it's better to organise something of the financial transaction at the worldwide level but if it's impossible maybe we will do it in the European Union, if it's impossible for the entire European Union in the eurozone."

The European Commission said it will have a concrete proposal next month which would then have to find approval among member governments and pass the European Parliament.


From Belfast Telegraph