BRUSSELS, March 13 (Reuters) - EU finance ministers and officials met on Tuesday to discuss a European financial transaction tax, Hungary’s deficit problems and IMF resources to be contributed to the euro zone’s bailout funding.
Following are comments by ministers and officials after the talks:
“I can’t imagine I’d be won over to a financial transaction tax with a few countries in the euro zone. That would be a rag rug. That doesn’t make sense. It is my conviction that the smallest thinkable unit is a common currency.”
”We exchanged views and agreed that given the basis of today’s discussions we will take time to lead intensive, informal talks at the informal (EU finance ministers’) meeting in Copenhagen.
”I declared again that financial transaction tax in all of Europe has clear priority as I am convinced that that’s the best solution. But we know that we need unanimous decisions for this and whether we’ll get those is uncertain.
”So we talked about what we’d do if it turns out in the next weeks and months that we will not get a unanimous opinion in the foreseeable future.
“I believe the debate today made clear that there is an understanding that we need such rules among almost all 27 members of the EU, so that I am confident we will find solutions.”
”We discussed the commission’s proposal at length to suspend cohesion funds for Hungary and we took this decision just now. But we noted that... as soon as Hungary meets its obligations, we have an automatic procedure to reverse the decision.
”We agreed that we explicitly expect a report from the commission at the Ecofin meeting on June 22 and that on June 22 we will deal with this then.
“The commission has assured us... that of course if Hungary meets its obligations it would take the necessary steps immediately. But the decision to suspend the funds for 2013 has been taken. It was unanimous, with one abstention, in the Ecofin.”
”We have a preference and it’s the rule that we don’t have a permanent head of the Eurogroup but that we stick to the way it has been that one of the member countries of the Eurogroup heads the Eurogroup.
”We’ve got enough permanent chairmen. It’s a very good solution that Thomas Wieser is now the permanent head of the Eurogroup working group.
“For the Eurogroup, the German government’s position is that you don’t need a permanent head. It could be a man of a woman. A finance minister works quite well. A minister of agriculture would not make so much sense.”
”We will not talk about this in the cabinet tomorrow. But we the commission will make proposals, which the working group will work with and then we’ll do it like the chancellor has always said, that we will look into this again in the course of May and I’ve said previously that March has 31 days.
”The informal Ecofin in Copenhagen is about right.
“With the ESM we have a permanent mechanism. We have decided to pay the first two of five tranches into it this year. We want to decide soon when the next tranches get paid in. That’s very important.”
“It is... now essential that we complete our crisis response, a cornerstone of this response (is) the financial firewalls. The constructive discussion we had yesterday and today, make me confident on the prospect of an agreement by the end of this month to reinforce the European financial firewalls.”
“I don’t think an additional cut of about 0.5 percent will have any significant impact, neither on economic growth nor on employment, or on the macroeconomic framework.”
“Our macroeconomic framework was based on hypotheses which were very cautious, extremely cautious, so logically there is some room.”
Following are comments by ministers and officials before the meeting:
”We’ll have a debate today about a fundamental political orientation considering whether it is justified to exempt the sale of financial products and services from a sales tax such as we have on the sale of goods and services with a value added tax.
“I think it’s probably not justified, but of course there are a number of arguments in favour and against.”
“You need a unanimous decision on tax issues, that’s not new. And that there are different opinions in the 27 states is also not new, but you can debate it at least.”
”We made progress in the Eurogroup yesterday. We saw the private sector accepted the bond swap offer more than we expected. That’s why, according to the ... EU/IMF troika, we now have a chance to get a slightly lower debt level in Greece in 2020 (than previously expected).
“On that, too, people always said it would never work, that (the private sector) would never accept it. You know if you always knew in advance what you can’t achieve, the world would never have been created.”
”Unfortunately growth in Hungary did not go as planned and that’s why the numbers had to be adjusted down.
”I want to make the critical observation that we would have preferred to give Hungary some time to fall into line, namely by offering a two-step process that makes a final decision on sanctions at the start of the summer.
“We must treat all states in the same way.”
“Yesterday we had a similar debate about Spain and we didn’t immediately impose sanctions but gave the them a chance to have a more ambitious budget for 2012.”
“Looking at the pressure put on Hungary I feel as if we are measuring with different measures.”
LUXEMBOURG‘S FINANCE MINISTER LUC FRIEDEN
”We are talking about transactions that are almost always cross-border transactions and if you only have the tax in a few countries then the transactions would move elsewhere.
”In principle the tax is fine but you need all 27 countries to participate. We need also a debate about who pays for the tax: is it the funds, is it the banks or is it in the end the citizens, the investors?
“All these factors need to be debated and I hope to have that in the coming months, maybe not today. I don’t think we will reach a decision about this today.”
“For me there are lots of unanswered questions, especially the one of the competitiveness of European financial centres. You have to bear in mind that centres outside of Europe such as New York and Singapore won’t introduce the tax so that’s why we as Luxembourgers see big questions we would like to have answered first.”
“Without (Britain) there will be no financial transaction tax.”
“We reiterated (last night) Spain’s commitment to the 3 percent target for 2013 and the only thing that was asked of Spain was an adjustment of the path towards that 3 percent figure, an additional adjustment this year, and Spain is completely committed to that adjustment.”
DE GUINDOS DECLINED TO SAY WHAT EXTRA STEPS SPAIN WOULD TAKE TO MEET THE 2012 TARGET, BUT SAID:
“Today we will discuss the maximum expenditure ceiling. It is very important to note that the majority of Spain’s arguments have been taken into consideration. There’s been a change in the stability programme of the previous government that was unrealistic in the current climate.”
“The financial transaction tax would be difficult to accept. It would increase the households’ lending costs. It would increase the cost of capital for companies. It would increase the costs for governments.”
“I think it’s very important that when we are seeing a stabilisation in the Europen economies that we don’t see any depreciation of credibility. It is very important that the Spanish government is sticking to their targets for 2013.”
ON COUNTRIES’ NEEDS TO REDUCE BUDGET DEFICITS:
”What’s true for Spain is true for all the other countries. We are in the process of restoring confidence in the euro zone. We are in the process of putting into place measures of protection and deficit reduction.
“No one can distance themselves from the target of budgetary consolidation.” (Reporting by Annika Breidthardt, Justyna Pawlak, Robert-Jan Bartunek, John O‘Donnell and Robin Emmott in Brussels, and Julien Toyer in Madrid)