Germany and France were yesterday to seek to revive the long-delayed EU financial transaction tax by proposing that member states be allowed to use the revenues to reduce their EU budget contributions, the Sueddeutsche Zeitung reported.
German Federal Minister of Finance Olaf Scholz and French Minister of the Economy and Finance Bruno Le Maire were to present their proposal on the sidelines of a meeting of eurozone finance ministers in Brussels, the German newspaper wrote in an article to appear yesterday.
According to their joint proposal paper, seen by the daily, the financial transaction tax could be “an important element” to strengthen the EU.
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The money generated by the tax “could contribute to a eurozone budget,” they write, and participating countries would be allowed to deduct their transaction tax contributions from their wider EU budget bill.
The proposed tax would be similar to the system currently used in France, which levies a tax on stock transactions in listed companies with a market capitalization of more than 1 billion euros (US$1.13 billion).
The newspaper said that Paris would like to see the entirety of the tax funds flow into the proposed 19-nation eurozone budget, while Berlin believes that the tax could also be used to benefit the 27-member EU budget.
Both countries also reportedly intend to come up with a plan to make sure that member states that cannot expect to generate much revenue from the tax are not left behind.
Brussels has been discussing an EU-wide financial transaction tax in some form or another for the past eight years.
As well boosting public coffers, the tax is seen as a way to encourage prudence and rein in the excesses of the financial markets that contributed to the 2008 global crisis.
However, the project has been mired in disagreements ever since, with quibbles about which financial products would be affected and at what rate. Some member states also fear it could harm market activity.
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