Leading the process for a tax on financial transactions, the Finance Ministers of Germany and France Wolfgang Schaeuble and Pierre Moscovici sent a joint letter to EU state leaders, proposing enhanced cooperation for the establishment of a common FTT.
The Schaeuble-Moscovici letter of September 28th however does not include any mention to commitments on the allocation of the collected revenue. Hence, hopes for a true “Robin Hood tax”, which would place a fair burden on the financial sector in order to tackle poverty and climate change, are fading.
In their letter, the Finance Ministers of the EU’s strongest economies state:
“We strongly believe in the need for a fair contribution from the financial sector to cover the costs of the financial crisis. It is our firm conviction that this objective can best be achieved by means of a financial transaction tax. Therefore we support the harmonized implementation of a financial transaction tax through enhanced cooperation based on the European Commission’s proposal for a Council Directive on a common system of financial transaction tax”.
Since then, Portugal announced the introduction of a national FTT, with no reference to environmental or welfare causes. Thus far, the Franco-German initiative has been supported through letters of participation in the enhanced cooperation process by nine member states, including Italy, Spain, Austria, Belgium, Estonia, Greece, Portugal, Slovakia and Slovenia. The UK continues to oppose a European FTT, claiming it would discourage businesses from the City.