EU financial transaction (Tobin) tax. What Merkel wants Merkel grabs
The "Robin Hood tax" on financial transactions is alive,
well and lives in Berlin. It is believed that the failure to fully endorse
the financial transaction tax (FTT) was one of the key areas where European
efforts to stem the crisis are classified as "insufficient." Experience
is that the tax would unfairly and adversely affect the financial trading
business.
Germany, strongly backed by France,
Spain and Italy has made the institution of the financial transactions
tax as one of its immediate goals while the British oppose the controversial
tax to impose a small charge on all financial transactions.
At the World Economic Forum mrs, Merkel told the political and business
leaders that it was "not promising" to have to explain to European citizens
that, despite the ravages of the banking crisis, they must still "pay
taxes on all products but not on financial products."
In her speech in Davos, Ms. Merkel also took a swipe at the US, claiming
that the "financial and economic crisis which started in America has left
a deep imprint in Europe." European judges in Luxembourg dismissed the
UK's first attempt to block the tax, saying that UK pleas were "directed
at the elements of a future tax" which has yet to agree.
The current status is that the tax will review and authorize those Eurozone
countries to negotiate the tax, through so-called "enhanced co-operation."
Britain has limited power to block the Eurozone from pursuing joint policies
under enhanced co-operation that potential damage UK interests. Let's
review the historical chronology of the legal challenges. From bonus cap
in the industry to the European Central Bank's policy on providing liquidity
to clearing houses.
- September 2011: UK in the court challenge to European Central Bank
rules requiring clearing houses to be based in the Eurozone if they
handle more than 5 percent of the market in a euro-denominated product
- June 2012: UK challenges a law giving the European Securities and
Markets Authority the right to ban short selling in emergencies
- April 2013: UK brings challenge in European Court against the decision
allowing 11 members of the EU to press ahead with plans for a financial
transactions tax
- September 2013: UK takes legal action against EU cap on bankers'
bonuses saying it threatens attempts to strengthen financial stability
- January 2014: European Court of Justice dismisses London's legal
attempt to prevent Brussels from winning powers to ban short selling
- April 2014: Judges in Luxembourg dismiss UK's first attempt to block
the financial transactions tax
Eleven Eurozone countries want to agree a joint tax, but negotiations
stalled as key states balked at the original plan's broad scope and the
practical risks of implementing it.
Therefore, there are several political attempts to rebuild a momentum
around a compromise that would see the gradual expansion of a levy that
would start as a stamp duty on equities and some derivatives.
Source: Financial Times, https://uk.finance.yahoo.com/news/angela-merkel-tobin-tax-jibe-000419732.html
