"Broad agreement" on FTT in European Parliament
10 January 2012 Brussels
Image: Shutterstock
A "very broad agreement" in favour of an EU financial transaction tax (FTT) emerged at the start of the Economic and Monetary Affairs Committee's work on the legislative proposal, according to a statement from the European Parliament.
Various MEPs said that in recent months, they had shifted their position in favour of an FTT. Wolf Klinz, MEP from German party, Alliance of Liberals and Democrats for Europe (ALDE), said that this was "because the financial sector has not learned the lessons from the crisis".
Repo and securities lending, as well as collateral transfers as part of financing transactions and hedging would be caught within the scope of the FTT and, depending on how the tax was structured, may make conducting trades uneconomical, warn market participants. Rejection of such a measure also formed part of the UK’s recent political decision not to sign on to any far-reaching pact to bind Europe’s economies more closely thus "isolating" the one member of the EU to go against the other 26.
Meanwhile, President Nicolas Sarkozy insisted that France must press ahead with a tax on financial transactions to force the issue in Europe, despite concerns that a unilateral move would isolate the country and damage the French financial services industry, reports the Financial Times. And even before the statement, French officials had hinted that the country would go it alone, a move many MEPs "deplored", particularly as the proposal seems to be gaining favourable momentum.
Only the European Conservatives and Reformists (ECR) political group spokesperson, Czech MEP Ivo Strejcek, stood by his group's fundamental opposition to the tax.
"Relocation [of financial players] will take place within weeks at most," Strejcek said, adding that banks should not be penalised since it was states most responsible for the crisis.
Marta Andreasan, MEP of the UK Independence Party, said that she found it "incredible that we are discussing a financial transaction tax for 2014 when the euro is burning".
However, the majority view was voiced by Sirpa Pietikainen, MEP for Finland, European People's Party, who noted that the tax would need to be implemented by, at the very least, the 17 eurozone countries.
The draft report is scheduled to be presented on 28 February, put to a committee vote in early April and a plenary one in June.
Various MEPs said that in recent months, they had shifted their position in favour of an FTT. Wolf Klinz, MEP from German party, Alliance of Liberals and Democrats for Europe (ALDE), said that this was "because the financial sector has not learned the lessons from the crisis".
Repo and securities lending, as well as collateral transfers as part of financing transactions and hedging would be caught within the scope of the FTT and, depending on how the tax was structured, may make conducting trades uneconomical, warn market participants. Rejection of such a measure also formed part of the UK’s recent political decision not to sign on to any far-reaching pact to bind Europe’s economies more closely thus "isolating" the one member of the EU to go against the other 26.
Meanwhile, President Nicolas Sarkozy insisted that France must press ahead with a tax on financial transactions to force the issue in Europe, despite concerns that a unilateral move would isolate the country and damage the French financial services industry, reports the Financial Times. And even before the statement, French officials had hinted that the country would go it alone, a move many MEPs "deplored", particularly as the proposal seems to be gaining favourable momentum.
Only the European Conservatives and Reformists (ECR) political group spokesperson, Czech MEP Ivo Strejcek, stood by his group's fundamental opposition to the tax.
"Relocation [of financial players] will take place within weeks at most," Strejcek said, adding that banks should not be penalised since it was states most responsible for the crisis.
Marta Andreasan, MEP of the UK Independence Party, said that she found it "incredible that we are discussing a financial transaction tax for 2014 when the euro is burning".
However, the majority view was voiced by Sirpa Pietikainen, MEP for Finland, European People's Party, who noted that the tax would need to be implemented by, at the very least, the 17 eurozone countries.
The draft report is scheduled to be presented on 28 February, put to a committee vote in early April and a plenary one in June.
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