COPENHAGEN (AFP) ― Germany on Friday laid out proposals to break the deadlock on a controversial EU tax on financial transactions, arguing for a levy only on company shares as a first step before broadening it out.
German Finance Minister Wolfgang Schaeuble circulated the plan, obtained by AFP, to his EU counterparts ahead of a debate on the issue on the second and final day of a meeting here.
Schaeuble acknowledged “it will not be possible to attain unanimous approval of the FTT (financial transactions tax) proposal within an appropriate timeframe” given resistance to the idea primarily from Britain.
“Accordingly, we would like to propose an intermediate step towards the introduction of a comprehensive FTT so that we can promptly implement a form of tax on financial transactions within the member states of the EU.”
This “intermediate step” would involve “a tax payable on all transactions involving shares of corporations listed on a stock exchange, with the tax levied according to the place where the corporation has its registered office.”
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German Finance Minister Wolfgang Schaeuble (Bloomberg) |
The plan is based, said the German proposal, on existing taxes in Britain, which levies a stamp duty, and in France.
The tax is aimed at making the financial services industry pay its way in the future after banks especially benefited heavily from taxpayer bailouts when the mortgage meltdown in the United States triggered the 2008 global financial crisis.
Proposed by the European Commission in September 2011, it is strongly supported by nine countries, including European power couple France and Germany.
But Britain, home to 80 percent of Europe’s finance industry, has warned that it would prompt investors to flee the 27-nation bloc.
Germany, however, warned this proposed intermediate step “would not be the end of negotiations on the broader and more ambitious FTT sought by the (European) Commission which also covers bonds and derivatives.”
