At the Council of January 22nd, the EU’s Economic and Finance Ministers endorsed the Commission’s proposal and gave a “green light” for enhanced cooperation among 11 EU member states for the establishment of a tax on financial transactions (FTT).
According to the Commission’s proposal of 2011 (Making the financial sector pay its fare share - IP/11/1085), “[t]he financial sector has received substantial financial support from governments. EU Member States have committed € 4.6 trillion to bail out the financial sector during the crisis. In addition, the financial sector has benefited from low taxes in recent years. …… A new tax on the financial sector would ensure that financial institutions contribute to the cost of economic recovery and discourage risky and unproductive trading.”
The member states participating in the enhanced cooperation process are Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia. This is the third time that article 329 of the Treaty is used by member states wishing to cooperate for the establishment of a joint policy and the first time relating to taxation.
According to a coalition of social and environmental NGOs that has been lobbying for the establishment of an EU-wide FTT, “FTTs are one of the few available options that could generate financial resources in sufficient quantity to make a meaningful contribution to the continuing costs of the global economic crisis. This would ensure the currently under-taxed financial sector pay a greater and fairer share of the costs that their actions caused. Importantly, the FTT would also help to regulate markets, curbing speculative market behavior and short-termism, and instead encourage more sustainable and equitable long-term economic growth”.
The crux of the pro-FTT argumentation by civic society organisations concerns the allocation of the collected revenues, which should be directed towards combating poverty and climate change. To date, no mention on allocation has been included in any of the relevant documents.
In the aftermath of the Doha Climate Change Conference (November 2012), WWF, along with Oxfam, ActionAid and the Institute for Policy Studies, issued a joint statement in favour of an FTT: “A financial transaction tax: turning a global crisis into a global opportunity”. WWF calls for allocation of a substantial part of the revenues to environmental and climate protection.
According to a 2011 Eurobarometer survey, 65% of European citizens are in favour of a FTT.