The January 22nd decision of the European Council to allow 11 member states to launch a tax on financial transactions through enhanced cooperation is facing serious pressure both from “inside” and “outside”. Italy, a member of the 11 states participating in the FTT enhanced cooperation process, expresses fears for short-term negative impacts on sovereign bonds.
The UK, supported by Luxembourg, is launching legal action at the European Court of Justice against the decision. Despite the fact that the UK has remained a strong opponent of the measure and does not participate in the enhanced cooperation process, the government of David Cameron claims that that the measure will impact UK firms and financial services trading in states where the FTT applies.
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 countries participating in the enhanced cooperation process are Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain.
According to a 2011 Eurobarometer survey, 65% of EU citizens are in favour of FTT.