May 23 2012
European Commission and Parliament back ‘Robin Hood’ tax
The European Commission has calculated that European Union (EU) Member States would pay 50 percent less into the general EU budget by 2020 if they agree to implement a financial transactions tax (FTT).
By the Commission’s estimate, Germany would pay €10.7 billion less to the EU budget by 2020, Poland €1.8 billion, Italy €6.4 billion and Latvia €81 million. The UK, the Netherlands and Sweden – the strongest opponents of the FTT – would save €7.6bn, €2.6bn and €1.6bn respectively. By 2020, total savings would amount to €81 billion.
The revenue – raised through a 0.1 percent tax on stock and bond trades and 0.01 percent on derivatives – one third would go to national budgets and two thirds (€54 billion) to the EU budget.
The transaction tax is the core to the Commission proposal for the next multi-annual budget (2014-2020) unveiled in June last year. However, Member States reacted negatively both to the five percent increase in the total budget and to the transaction tax
The Commission has come up with some striking figures to assist the debate and show that Member States would benefit. But the sums did not please everyone. The UK Government was quick to release a statement saying it completely refuted the suggestion that it would benefit from an EU transactions tax.
With the budget to be agreed by the end of the year, the overall debate is beginning to heat up.
A group of nine Member States has said it wants to press ahead with the FTT on its own (which would remove it from the commission’s grasp) while Germany and the UK and others have said the budget should not increase beyond inflation.
However, my colleagues at the European Parliament will play a stronger role in pushing for the FTT getting the go ahead.
MEPs are keen on the financial transaction tax, keen on supporting growth policies and keen on spending more. Last year, the Parliament approved a report calling for a 5 percent increase in the next multi-annual fund.
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