January 28, 2011 / 12:38 AM / 9 years ago

Austria hopes to win Germany for Tobin Tax -paper

BERLIN, Jan 28 (Reuters) - Austrian Chancellor Werner Faymann called on Germany to throw its weight behind a tax on financial transactions designed to limit excessive market speculation.

Austria proposed the idea two years ago to the European Union and found itself “very much alone,” Faymann said in comments published by German daily Sueddeutsche Zeitung on Friday.

“Happily, this has changed,” Austria’s head of government said.

“Now I hope to be able to win over Germany as well for this plan,” he added.

Ever since the financial crisis, the idea of Tobin-style transaction taxes has been gaining more support as advocates aim to prevent a surge in speculative, often leveraged bets seen to be of little productive benefit to an economy.

Opponents of the tax, however, argue that these taxes penalise everyone and add that speculators in fact provide a very useful service by increasing the overall liquidity in the system.

Austria’s Faymann also called for current euro area guidelines — like the 3 percent deficit ratio to gross domestic product — to be expanded to include other elements such as productivity targets or even the prohibition of wage dumping. (Reporting by Christiaan Hetzner; Editing by Steve Orlofsky)

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