Reuters logo
EU still at odds on finance tax, 2016 start in doubt: diplomats
December 8, 2014 / 9:58 AM / 3 years ago

EU still at odds on finance tax, 2016 start in doubt: diplomats

BRUSSELS (Reuters) - Eleven euro zone countries remain divided over a tax on financial transactions a day before a self-imposed deadline to agree on its broad outlines, casting doubt on whether the levy can be implemented in early 2016, diplomats said on Monday.

A picture illustration taken with the multiple exposure function of the camera shows a one Euro coin and a map of Europe, January 9, 2013. REUTERS/Kai Pfaffenbach

Speaking before a meeting of the 11 on Monday evening that was called by France, a prime proponent of the tax, several diplomats said differences were still wide, diminishing previous hopes a deal on the principles could be announced on Tuesday.

Some participants at Monday’s meeting, to be chaired in Brussels by French Finance Minister Michel Sapin, still hoped to make some progress, possibly focusing on a narrower range of transactions such as equities. But others saw no consensus.

The plan, led by Germany and France but opposed by Britain, aims to make banks share the cost of cleaning up Europe’s debt and banking crisis. It was inspired by the “Tobin tax”, a scheme to penalize short-term currency speculators proposed by Nobel prize-winning economist James Tobin in 1972.

Despite the critical mass the initiative gained in Europe in October 2012 to be able to go ahead, disputes over how to levy the tax and whether to include derivatives have meant continued delays. An initial 2014 start date has slipped to 2016.

Now that date looks in doubt, said two diplomats working on the plan, while a document seen by Reuters set out the scale of the divisions.

Finance ministers from Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain were originally due to sign off on the broad outlines of a deal by a meeting in Brussels on Tuesday.

“An agreement will not be possible by the end of the year,” said a senior diplomat close to the talks. Asked what that meant for a 2016 start date, a second diplomat said: “It will need a lot of political will.”

None of the 11 countries are willing to say publicly that the plan is dead. German Chancellor Angela Merkel worked hard behind the scenes in 2012 to encourage countries including Spain and Italy to sign up and its launch was a breakthrough.

But a Dec. 3 document from Italy, which will chair Tuesday’s meeting, said there was no clarity over the principles of how the levy would be collected. “Further reflections on their application will be necessary,” the document said, making no mention of a compromise plan.

France has said that taxing only share transactions in the 11 participating countries would raise roughly 6 billion euros ($7.5 billion) a year.

The European Commission originally said a tax on stocks, bonds and derivatives trades could raise up to 57 billion euros a year if applied across all EU countries.

Additional reporting by Ingrid Melander and Alastair Macdonald

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below