Making the European Union Financial Exchange
The EC President Jose Manuel Dura Barros announced the measure before the full European Parliament, where he explained that the contribution of the banking crisis resolution is a matter of “justice”, especially when the sector has received grants and guarantees for taxpayers worth 4.6 billion Euros in the last three years. The new tax, the EC hopes to introduce in 2014 or even earlier, would be at least 0.1% for the sale of bonds and shares and 0.01% for derivatives, although Member States may apply higher rates if they wish.
SMEs and individuals excluded.
Brussels proposes that the measure applies to all financial instruments transactions between entities where at least one of them is established in the EU, irrespective of whether they were on exchanges or extrabursátiles.Quedarían exempt from tax all transactions involving the private customers or SMEs, as well as currency exchange transactions in cash and capital raising by companies or public agencies through the issuance of bonds and shares in the primary market.
The need for harmonization.
Ten EU countries: UK, Belgium, Cyprus, Finland, France, Greece, Ireland, Italy, Poland and Romania, and apply similar taxes, but the EC considered a good idea as to harmonize the whole Union. Decisions on taxation in the EU require unanimous support from member countries, which complicates the adoption of measures, and in this case the twenty-seven are much divided.
Reluctance of the United Kingdom and Sweden.
United Kingdom has repeatedly expressed its opposition to the measure because he believes it would hurt banks and government sources indicated that London would only agree to apply this rate if you impose a “global”, which seems quite unlikely for the rejection that generates the U.S. idea. Sweden also is reluctant and Belgium, although party as Germany and France, proposes to consider the idea that the rate applies only to the countries of the euro, the case could not be applied across the EU. Brussels dismisses this idea because he believes that if you exclude the countries already implementing a similar rate would not eliminate inequality in the EU and European defense because of the action in international forums like the G20 would be less credible if the Member States show divided.
A nation and community coffers.
The EU executive also points out that the revenues from this tax would go to the national coffers and community, as well as being a form of direct funding to the budgets of the countries, would reduce the contribution of the partners to the budget of the Union. As for the possibility that banks move the additional cost of this tax to their customers, the European Commissioner for Taxation, Algebras Semite, hoped that the high competence of the European financial sector, where 8800 operating entities, prevent, but Community sources clarified that Brussels cannot do anything if that happens.
Opposition from the industrial bank.
The tax has been endorsed by the European Confederation of Trade Unions and NGOs who believe it will help reduce speculation in the origin of the crisis, and has been criticized by the European Banking Federation fears that harm the growth of the EU.However, EU sources said that while the measure could have an impact of 0.5% in GDP in two or three decades, its effect on growth would be quite small. The ECB has also been opposed to the rate, as reflected in its latest Financial Stability Report, because he fears its impact on financial market conditions and its ability to generate income. The measure will now be debated by EU countries, before deciding which should take into account the opinion of the European Parliament.