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Pessimism about FTT after Estonia leaves working group

Some media report on the agreement reached by 10 EU member states over a Financial Transaction Tax, as the Estonian minister of finance refused to sign the agreement. Jornal de Negocios quotes France’s finance minister admitting that the agreement is modest, but that this is a giant step for a general FTT. Germany’s finance minister said that this agreement is better than nothing.

Il Sole 24 Ore quotes Italian Economy Minister Padoan saying this is a “good result”. According to Der Standard, Austrian Finance Minister Hans Jörg Schelling even spoke of a “breakthrough.” However, he was forced to admit that only a “basic agreement” had been reached. Media minimise the agreement, saying the ministers only managed to agree on the project’s outline, the tax’s scope and possible exemptions, and failed to meet their year-end deadline, postponing the deal until June 2016. EcoFin Commissioner Pierre Moscovici is quoted by Le Monde stressing “if 11 of us fail to agree, how are we going to agree among 28?”

He is aware of the difficulties in finding consensus on taxation matters in Europe, and is counting on the current “strengthened cooperation” on the FTT to introduce a discussion on corporate taxes in a few months’ time. Media even express pessimism about the fate of the FTT with headlines mentioning a never ending story (Handelsblatt and Der Standard) and commentators saying it is doomed to failure (FAZ, Les Echos). Handelsblatt‘s Ruth Berschens comments that such projects can only be seen with sarcasm. Estonia has now left, citing concerns that the many planned exemptions to the FTT would make it cost-ineffective.

The group has now shrunk to ten, and other member states such as Slovenia have also voiced their fears. FAZ’s Hendrick Kafsack says the tax is only supported by ten member states, including none of Europe´s financial hubs. This is doomed to fail, and means that the tax risks becoming no more than a damper on growth and employment. He calls on Wolfgang Schäuble to withdraw Germany’s support for the tax. Het Financieele Dagblad reports that the chance that the Financial Transaction Tax (FTT) bill ever gets off the ground is shrinking.

In Les Echos’ editorial, Guillaume Maujean says “this diplomatic saga, which has been going on for four years, is not over yet” and is “doomed to failure.” While President François Hollande dreamt of a great Tobin Tax used for the struggle against global warming, the author says the Paris negotiations need to make progress on the issue of providing financial aid to the poorest countries. But it is a mistake to believe the FTT could contribute to these funds.

Der Standard notes that €50 billion in revenue was projected by the European Commission. But this is just a chimera. For EU countries, their own interests are more important than those of their neighbours. A compromise is impossible, even for the core countries of the EU. This is an example of the prematurity of the idea that a core Europe could solve problems in the EU more easily. In other comments, Claudio Antonelli criticises the Italian government in Libero Mercato for not following Britain’s example, and stresses that the Tobin tax could be a major disaster for the Italian economy.

On SWR Info, Alfred Schmidt comments that an FTT would be the right direction for Europe as it would be able to balance out the damage done during the financial crisis in small part, and would also work to keep high-frequency trading in check. Mr Schmidt finds that the FTT’s failure has caused justified doubts about European Commissioner for Financial Stability and Services Jonathan Hill’s qualifications for his position.



  1. FTT ja EEsti

    Comment by Lemmi on December 14, 2015 at 6:44 am
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