This articles comes fromt he Grayling Brussels Espresso May 2012 edition.
The Commission is proposing that Member States place a minimum tax of between one-tenth and one-hundredth of one
A new tax coming out the woods? (picture by courtesy of JeSaurai)
percent on a range of financial trades.
Although these proportions seem tiny, the sheer volume of trades that occur every day means that the Commission anticipates raising up to €57 billion in revenue from the move.
One Member State attempting to cash in on these high stakes is France. A one-time opponent of the tax, then President Sarkozy became its standard bearer, pressing ahead with a light French version of the tax when frustrated with the slow pace of progress in Brussels.
On the other side of the Channel, David Cameron has adopted a more pragmatic approach, insisting the tax is unworkable unless it is applied on a global scale, and expressing fears that the City of London would be hit disproportionately which would send investors packing.
Having already wielded his country’s veto on the fiscal compact, he has demonstrated his willingness to block proposals that he perceives as a threat to the UK’s interest.
With unanimity required for decisions on taxation and deep divisions within the Council, there is little hope of a speedy agreement. Nine Member States have already formally requested to be allowed to press ahead on their own, with the Lisbon Treaty’s Enhanced Cooperation procedure providing a framework for a core group of countries to do so.
The Commission is reluctant to go down this road, however, not least because they would then lose control of the proposal.
This may partly explain the recent push to advocate for the FTT on the basis of the cash savings that the tax would bring about for Member States contributing to the EU budget.
Earlier this month, EU Budget Commissioner Janusz Lewandowski claimed the measure could reduce by over €80 billion the direct contributions from Member States over the course of next 7-year budget cycle.
Although there is little evidence that his arguments have gained much traction in key opposing Member States, if the Commission did manage to bring the naysayers around, it would not only score a major political victory on financial regulation, but also reach the promised land of generating independent “own resources”, of serious significant value, a goal it has held dear for decades.
However, an EU-wide, or even Eurozone-level, agreement seems optimistic. With negotiations on the next financial cycle due to conclude by the end of the year, time is not on the side of Barroso and his band of Commissioners in his attempt to emulate Robin Hood and his Merry Men.