The draft text for a European Financial Transaction Tax ( FTT) could be ready by the middle of this year, according to a top EC official. Marianne Thyssen, the European Commissioner in charge of Employment, Social Affairs, Skills and Labour Mobility was speaking during a parliamentary debate Wednesday, on the long-awaited financial transaction tax planned for Europe.
But there was a strong, mixed reaction in the subsequent debate which sometimes crossed political grouping lines in Parliament. Many member states have long rejected the idea of levying a tax on financial transactions such as the buying and selling of shares and bonds.
This lack of political agreement among member states over the proposal has stymied attempts to introduce the levy -- the idea was first mooted seven years ago. In 2013 a group of ten governments submitted to a process of "enhanced cooperation" to try and move ahead with the process.
Text ready by mid-2017
In a statement opening the parliamentary debate, Ian Borg representing the Council which is currently under a Maltese Presidency, acknowledged that it had taken a long time to bring the tax to fruition. Minister Borg echoed the words of the Commissioner. "A draft legislative text could be drafted in the coming months," he said.
During the debate, many MEPs protested the proposal saying it would not generate more money, but simply create more costs. David Coburn (EFDD, UK) echoed the opposition of Dariusz Rosati (EPP, PL) when he described the tax as a “thoroughly bad idea”, by saying it would be paid by people saving for their pensions rather than “fat cat bankers”, while Mr Rosati warned that the levy could harm productive transactions.
But Mr Rosati shared a view later expanded on by Izaskun Bilbao Barandica (ALDE, ES) that the tax should be aimed at clamping down only on speculative activity. Ms Barandica said the tax shouldn’t hurt users of banking services by only the medium- and large-scale sale of financial assets. But Brian Hayes (EPP, IR) summarised the doubt felt by many saying "there was a fair degree of skepticism about how operational this tax is."
A tax “in support of the real economy”
Commissioner Thyssen said the levy would strengthening the single market by reducing different national approaches to financial taxes; it would ensure the financial sector made a fair and substantial contribution to public reserves, and would encourage it to engage in more responsible activities in support of the real economy.
Members of the S&D political grouping, which pushed for the debate, such as Pevenche Berès (S&D, FR) and Ana Gomes (S&D, PT) were strongly in favor, and they were joined in their support by others including Patrick Le Hyaric (Gue/NGL, FR). Supporters reject criticism that the FTT would hinder investment, with one MEP calling for "an enhanced cooperation of the willing". Supporters said it has a redistributive aim and would enhance social justice with revenue raised going to boost growth and jobs.
Romana Tomc (EPP, SL) while welcoming the attempt of the Council and Commission to introduce the tax, sounded a note of caution saying that this tax must be applied to all member states otherwise there would be a flight of capital to markets without the tax.