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Germany's Future Grand Coalition Unites On FTT

by Ulrika Lomas, Tax-News.com, Brussels

31 October 2013


German Chancellor Angela Merkel's Christian Democratic Union (CDU) party and the Social Democrats (SPD) have united on plans for a financial transactions tax (FTT), during ongoing Grand Coalition negotiations.

The CDU and SPD have reached an accord on plans to push through a FTT, negotiator Martin Schulz (SPD) explained following a meeting of the "Europe and bank regulation" working group in Berlin.

Confirming the consensus, Markus Ferber of the CDU's Bavarian sister party, the Christian Social Union (CSU), emphasized the parties' commitment to ensuring that the tax is introduced quickly in the 11 European Union member states that have backed the plans, within the framework of enhanced cooperation. Ferber stressed that the black-red agreement is "a clear signal" that a Grand Coalition would pave the way for the tax to be implemented.

Marking significant and rapid progress, working group negotiators from both sides have agreed to press for the swift introduction of an FTT at European level, once a black-red coalition is in place. Both parties are in agreement that the tax should have a low rate and a wide base.

The European Commission's FTT proposal provides for a 0.1 percent rate of tax to be levied on shares and bonds and for a 0.01 percent rate to be imposed on derivatives. Forecast to generate around EUR35bn (USD48.1bn), the tax is designed to ensure that the financial sector contributes to the costs of overcoming the crisis and to curb speculation.

TAGS: tax | European Commission | speculation | tobin tax | tax rates | Germany | regulation | Europe

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