Law / Politics

Towards a Financial Transaction Tax (FTT) in the EU

E-ticker (Wikimedia Commons)

E-ticker (Wikimedia Commons)

The issue of introducing a financial transaction tax (hereinafter – FTT) at the EU’s border came back in the frontline in the aftermath of the financial crisis, as an option to “moralise capitalism”. However, the idea appeared to be highly controversial, so that no agreement could foreseeably be reached on an EU-wide basis. 

As a result the process for enhanced cooperation in this area was launched. Following the request of eleven Member States – Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain – on 22 January 2013, the Council adopted Decision 2013/52/EU[i] authorising enhanced cooperation in the area of financial transaction tax. Consequently, on 14 February the Commission issued a proposal for directive[ii]. For us, it is the occasion to (re)discuss the concept of enhanced cooperation (I), the competences of the EU in fiscal matters (II) and the idea of FTT itself (III).

You can click here to access freely the full article on the EU Law blog of King’s Student Law Review (KSLR).

One thought on “Towards a Financial Transaction Tax (FTT) in the EU

  1. I think there are two dangers with the route taken here: One is that, when it is so difficult to get agreement between 11 countries, the politicians are not very keen to then listen to shortcomings of their agreements brought to their attention by people in the industry (finance, goods, services, and pensions industries). The second is that it really is very, very harmful in some respects, and desperately NEEDS input from industry:
    making the repo market unusable overnight will actually increase the risks and in the financial system (since repos are an easy way to make inter-bank lending more secure against bank failures).

    Alas, I can see in public debates, the politicians have just about had it with listening to the industry. That’s neither a productive, nor a particularly safe starting point. You can read more on my analysis on http://karlstrobl.com.

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