EC approves 10 eurozone states' plan to roll out financial transaction tax
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E-mail Xinhua, October 24, 2012
The European Commission (EC) said Tuesday that it had approved a plan by 10 eurozone member states including France and Germany to implement the financial transactions tax (FTT).
European Commission President Jose Manuel Barroso said in a statement that he was "delighted" to see that 10 member states have indicated their willingness to participate in a common FTT along the lines of the Commission's original proposal.
The 10 countries are France, Germany, Austria, Belgium, Greece, Italy, Portugal, Slovakia, Slovenia and Spain.
The tax, expected to raise "billions of euros" of revenue for member countries mired in the debt crisis, is also about "fairness", said Barroso.
"We need to ensure the costs of the crisis are shared by the financial sector instead of shouldered by ordinary citizens," he added.
The proposal for the FTT, consisting of a rate of 0.1 percent on the trading of bonds and shares and 0.01 percent for derivatives deals, was put forward by the EC in September 2011.
The tax, if applied by all the 27 European Union (EU) nations, would be able to raise 57 billion euros (about 73.9 billion U.S. dollars) in revenues each year, according to the EC's estimates.
However, the proposal failed to win unanimous support among all EU member states, due to strong opposition from some EU countries led by the United Kingdom, which accounts for more than 70 percent of the entire European finance sector and fears the tax might hurt its competitiveness.
The EC then decided to resort to a legal process called "enhanced cooperation," under which, when at least nine member states, or one third of the 27 EU countries, support a new legislation, these countries can go ahead first, pending approval by other EU countries and the European Parliament.
The EC will prepare a revised proposal for the tax based on the original principles it raised in September 2011 and the specific conditions set by the 10 EU countries.
The FTT was also known as the Tobin tax, named after James Tobin, a U.S. Nobel laureate in Economics, who first proposed the tax in 1972 for easing financial market volatility. Endi
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