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A view of
the skyline of the banking district in Frankfurt (AFP/File, Daniel Roland)
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BRUSSELS —
The European Commission on Tuesday backed plans by 11 EU nations to launch a
hotly contested "Robin Hood" financial transactions tax (FTT) that is
tipped to raise billions for the public purse.
After moves
to launch the tax across the European Union were scuttled during months of
raucous debate by Britain and others, the EU executive proposed that countries
in favour, including France, Germany, Italy and Spain, go ahead on their own.
"A
core group of member states are keen to move ahead with a common FTT ... And I
applaud this," said the European Union's taxation commission Algirdas
Semeta.
"I
firmly believe that an EU FTT has great benefits to offer ... I also believe
that now is the right moment to move ahead with it. Because in difficult times,
fairness matters."
Proponents
of a transactions tax, which has its roots in the 1970s, believe it will help
curb the culture of greed that led to the 2008 global financial crisis and
ensure that a bailed out industry pays its fair share.
"This
is a once in a generation chance to ease the burden on European citizens,"
said Oxfam spokesman Nicolas Mombrial. "Countries which have not signed up
should do so or risk finding themselves on the wrong side of history."
While
Britain has loudly opposed the introduction of a transactions tax in fear it
would hit the City of London, Austria, Belgium, Greece, Portugal, Slovakia and
Slovenia have all signed on to the scheme.
Late
Tuesday, Estonia became the 11th nation to join the group, Semeta said on
Twitter.
The
Commission said in a statement that all the legal conditions to impose an FTT
had been met, and that it believed the tax would not undermine the workings of
the European single market which seeks to ensure a level playing field for all.
"This
tax can raise billions of euros of much-needed revenue for member states in
these difficult times," said Commission president Jose Manuel Barroso
said.
"We
need to ensure the costs of the crisis are shared by the financial sector
instead of shouldered by ordinary citizens."
The
introduction of the FTT by a small group of nations was made possible through
rarely-used EU powers of "enhanced cooperation", enabling a minimum
of nine nations -- one third of the 27 member states -- to trailblaze new
legislation.
This has
been used twice before when the EU-27 failed to reach unanimity, in
cross-border divorce law and more recently for the EU patent.
Britain
feared taxing trade in stocks and other financial instruments would move
business to New York, Hong Kong or Singapore, harming its status as the top
European financial market. Britain lays claim to about three quarters of the
entire European finance industry.
The
commission proposal must yet be formally approved by members of the 27-nation
bloc who will not be applying the FTT, and by the European Parliament, before
taxation commissioner Semeta can release a detailed proposal on the tax.
Nine months
ago he suggested a low EU-wide tax -- 0.1 percent on share and bond trades,
0.01 percent on other transactions -- expected to bring in 57 billion euros
($73.9 billion) a year.
With the
group of 11 accounting for two-thirds of Europe's economy, likely revenue from
the tax is likely to be substantial.
Within the
eurozone, Luxembourg, which houses a sizeable finance sector, has also opted to
stay out, alongside Cyprus, Finland, Ireland, Malta and the Netherlands.
A question
mark remains over what the 11 nations will agree to do with the proceeds,
channel funds into the EU budget as the Commission has proposed, or not.
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