SALON

Friday, Jun 22, 2012 5:15 PM UTC

EU countries divided on financial transaction tax

By

Topics: From the Wires,

EU countries divided on financial transaction taxFrom left, Denmark's Economy Minister Margrethe Vestager, Finland's Finance Minister Jutta Urpilainen and Austria's Finance Minister Maria Fekter share a word during a meeting of EU finance ministers at the European Council building in Luxembourg on Friday, June 22, 2012. European finance ministers are meeting in Luxembourg to discuss the idea of a tax on financial transactions that would be used to make banks pay for their own bailouts. (AP Photo/Virginia Mayo) (Credit: AP)

LUXEMBOURG (AP) — A plan for European Union countries to tax financial transactions and use the proceeds to fund future bank bailouts ran aground on Friday, with just 10 out of 27 countries prepared to support it.

The impasse over the proposal by the European Commission, the European Union’s executive body, highlights the difficulty of getting European politicians to agree on just one plan as they wrestle with the incredibly complex problem of containing the debt crisis that threatens to undermine the euro.

The proposed financial transactions tax would charge banks 0.1 percent of the value of sales of stocks or bonds, and 0.01 percent per derivative contract. Money raised by the tax would then be used to fund future bank bailouts. Some countries such as the Netherlands and the U.K . are vehemently opposed to the scheme.

George Osborne, the British chancellor of the exchequer, said such the tax would hurt the economies of countries that adopt it, as financial transactions will be re-routed to countries outside the union.

“I would have thought we want to be attracting business rather than the other way around,” he said.

However, finance ministers from 10 countries that endorsed the idea — including Germany, France, Spain, Greece, Poland, Italy and Austria — said they still wanted to forge ahead with the plan and hoped that some of the countries who are still undecided would join them later.

German Finance Minister Wolfgang Schaeuble said he would have preferred all 27 EU member countries adopt the tax, but he will still pursue it. “We emphatically want to move ahead,” he said.

“I will not allow this project to die,” Austrian Finance Minister Maria Fekter said.

After it became clear the plan would not be adopted by all, the debate ended without a clear result. European Union lawyers then outlined the painstaking procedure for a group of countries to negotiate a side agreement within the EU. As a first step, at least nine countries must draft a proposal and put it forward as a so-called “enhanced cooperation.”

“So it’s not (happening) tomorrow then,” joked Denmark’s Margrethe Vestager, who was chairing the meeting, after hearing the process explained.

This is not the first time cracks have appeared in the European Union over its response to the financial crisis. In March, the so-called fiscal compact, which would introduce stricter requirements for national budgetary discipline, was signed by 25 EU countries — but not Britain and the Czech Republic. If the treaty is ratified, it will apply to those countries that ratify it rather than to all EU countries.

___

Don Melvin can be reached at http://twitter.com/Don_Melvin

More Don Melvin.

Next Article

Related Stories

More Related Stories

Featured Slide Shows

The week in 10 pics

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
    Credit: AP/LM Otero

  • Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
    Credit: AP/Matt Rourke

  • A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
    Credit: AP/Jenny Aicher

  • Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
    Credit: AP/Molly Riley

  • Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
    Credit: AP/J. Scott Applewhite

  • Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
    Credit: AP/Carolyn Kaster

  • O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
    Credit: AP/Las Vegas Review-Journal/Jeff Scheid

  • Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
    Credit: AP/NASA/Chris Hadfield

  • When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
    Credit: AP/Jacquelyn Martin

  • A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
    Credit: AP/The Duluth News-Tribune/Clint Austin

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

Comments are not enabled for this story.

follow salon

Most Read

Popular on Reddit

links from salon.com

From Around the Web

Presented by Scribol
listener_new_rect The Listener: Chekhov's story mirrors Russia's own

Recommendations