July 8, 2015 / 11:19 AM / 3 years ago

EU's Moscovici sees financial transaction tax in place early 2017

PARIS (Reuters) - Negotiations over a planned tax on financial transactions in 11 European countries could wrap up later this year and the levy could be in place by early 2017, EU Economic Affairs Commissioner Pierre Moscovici said on Wednesday.

European Economic and Financial Affairs Commissioner Pierre Moscovici arrives at a euro zone finance ministers meeting on the situation in Greece, in Brussels, Belgium, July 7, 2015. REUTERS/Francois Lenoir

France and Germany proposed the tax in 2012, but talks among the 11 countries that have agreed to levy it have stalled over what financial instruments should be covered and at what rate.

Speaking at a financial sector conference in Paris, Moscovici said that the aim was to have a widely applicable tax but at a low rate.

“I have the impression that all of that (the talks) is going to wrap up during the autumn of 2015 with application at the start of 2017,” Moscovici said.

French Finance Minister Michel Sapin told journalists at a news conference on Wednesday the tax could be applied in a first phase as early as January 2016 as it would be too complicated to have it fully up and running until later.

“We’ve made good progress on the basis sought by France,” Sapin said. He added that that meant a widely applicable tax with a low rate that could be collected in a way that would discourage financial firms from shifting business to countries where the tax did not apply.

BNP Paribas deputing chief operating officer Alain Papiasse said that financial companies in the countries covered by the tax were considering moving operations to London, which has spurned the levy from the start.

“The big risk for the European Union and the finance ministers concerned is to have a tax that doesn’t bring anything in and causes business to leave for a financial center respected by all but which is asking itself whether it wants to be in the European Union,” Papiasse said in response to Moscovici.

Reporting by Leigh Thomas; additional reporting by Yann Le Guernigou; Editing by Toby Chopra

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