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EU Member States React To EU FTT Declaration

by Ulrika Lomas, Tax-News.com, Brussels

14 May 2014


Luxembourg's Finance Minister Pierre Gramegna has called on the European Commission to demonstrate that the introduction of a financial transactions tax (FTT) in 11 European Union (EU) member states will not have an extraterritorial impact on non-participating countries.

Gramegna was commenting after ten member states newly affirmed their commitment to introduce the tax. He said that EU FTT proposals have been drawn up "without the necessary transparency" required under the EU Treaty, and with disregard to the effects of the levy on countries opting out of the initiative, which he said will have a negative impact on growth, European financial markets, and potentially the cost of financing the European Investment Bank.

Meanwhile, Dutch Finance Minister Jeroen Dijsselblom expressed his concerns about the impact of an EU11 FTT on Dutch pension funds. Dutch business organizations reinforced that Netherlands should under no circumstances join the group of participating member states. They argued that the tax will hinder growth and economic recovery, reduce investment and employment, and prove harmful to small businesses and pensioners.

In contrast, Austrian Finance Minister Michael Spindelegger described the approval of the financial transactions tax, at the latest meeting of European Union finance ministers, as a "major joint achievement." He said: "We agreed to a joint political declaration of intent, thereby making an important decision for Europe. We want the financial system to share in the costs of the financial crisis and make the financial system as a whole more stable."

"Austria has been in favor of a financial transaction tax right from the start. We have worked on introducing this tax for years, but have never been in favor of proceeding alone as an individual nation. We have now reached joint agreement on the key points," he said.

Austria, Belgium, Germany, Estonia, Greece, France, Italy, Portugal, Slovakia, and Spain agreed in Brussels to a phased introduction of the tax, starting with coverage of share trading and of some derivatives. Further details are to be in place by the end of 2014, and the financial transactions tax is due to take effect in 2016.

TAGS: Finance | tax | investment | small business | business | Belgium | Netherlands | Portugal | tobin tax | Estonia | Luxembourg | Slovakia | Austria | France | Germany | Greece | Italy | Spain | European Union (EU) | Investment | Europe | Invest | Investment

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