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German push for transactions tax hits resistance in Europe
* Schaeuble says failure to act would be "disastrous"
* EU countries deadlocked after years debating tax on trading
* Italy's Monti, Dutch finance minister sound note of caution
By John O'Donnell and Annika Breidthardt
BRUSSELS, March 12 (Reuters) - Germany's push to win backers for financial transactions tax met resistance on Tuesday among European Union ministers divided on the question of how to collect more money from banks blamed for the financial crisis.
"We must not waste our time for years and not get a solution," Wolfgang Schaeuble, Germany's finance minister told a meeting of EU ministers in Brussels.
"If we see there will be no solution ... we are obliged to look for alternatives," he said, adding inaction would be "disastrous".
Having failed to win support for the measure from the United States and other members of the G20 leading economies, France and Germany are now making a drive to end more than two years of debate on the issue in Europe.
The basis for the discussion is a European Commission blueprint for a tax that could raise up to 57 billion euros ($75 billion), with much of it coming from London, the region's biggest trading centre.
Britain has said it will stop any such pan-European tax, fearing it would damage London's financial hub. Mark Hoban, a junior treasury minister, reiterated this opposition on Tuesday.
ECONOMIC SIDE EFFECTS
Other countries, which have been supportive of the idea, also expressed reservations about implementing a tax.
Mario Monti, Italy's prime minister and economy minister, while confirming his "support for the objectives of the proposal", called for an examination of its economic impact.
Dutch finance minister Jan Kees de Jager expressed support for measures to make banks pay their fair share, but also called for research into the "economic side-effects" of a tax.
In conciliatory remarks, Germany's Schaeuble appeared to signal that he was open to alternatives to the Commission's proposal, pointing to banks' exemption from value added tax (VAT).
Maria Fekter, finance minister of Austria, which has also backed a tax on transactions, spelt out her willingness to compromise.
"I also have a pragmatic point of view with alternatives or some kind of compromise," she told ministers. "If we come a bit nearer to a VAT tax, it might be acceptable to those countries who have already a VAT tax on their transactions."
Political leaders in Germany, which has national elections next year, and France, where two rounds of presidential elections take place in April and May, believe the tax will please voters who blame banks for the economic crash.
German Chancellor Angela Merkel has repeatedly signaled that she wants a result by March, saying in January efforts would be made until then to get an agreement among all 27 EU countries, a goal that has always looked ambitious.
France is set to introduce its own tax, which resembles Britain's stamp duty on share trading, in coming months.
Earlier this year, nine countries, including Germany, France, Belgium, Italy and Austria wrote to Denmark urging it to "accelerate the analysis and negotiation process" on the issue.
These nine countries would be sufficient in number to launch their own tax through a procedure known as enhanced cooperation.
Last year, the European Commission proposed a scheme to tax stock, bond and derivatives trades from 2014 across the EU. It would work in a similar way to Britain's stamp duty of 0.5 percent on share trades, which raised almost 3 billion pounds in the financial year to April 2011.
Even if Britain were to opt out, trades carried out in London could be affected.
As the proposal stands, it is the location of the individual or bank buying or selling the asset that triggers the tax.
If there is any link to the EU, either through the buyer or seller, then the tax will fall due.
Any pan-European plan needs the backing of all 27 member states to become law, although a smaller scheme is possible.
Under the current proposal, stock and bond trades would be taxed at the rate of 0.1 percent, and derivatives trades at 0.01 percent. ($1 = 0.7610 euro) (Writing By John O'Donnell; Editing by Rex Merrifield and Erica Billingham)
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