Tuesday, October 9, 2012
Eleven EU Countries Agree on Transaction a.k.a. 'Tobin' Tax.
Eleven EU Countries Agree on Transaction a.k.a. 'Tobin' Tax.(Spiegel).Finance ministers from 11 European Union countries agreed at a meeting in Luxembourg on Tuesday to support a tax on financial transactions, hoping to discourage risky trading while simultaneously raising revenue. Germany and France, the EU's two largest economies, have long supported the idea of the tax, while countries like the Netherlands, Sweden and the United Kingdom remained staunchly opposed out of fears the tax could harm the competitiveness of their financial markets. Sweden imposed a similar tax in the 1980s, only to lose much of its trading activity to London. Stockholm later repealed the law. "We still think that the financial transaction tax is a very dangerous tax," Swedish Finance Minister Anders Borg said ahead of the meeting. "It will have a negative impact on growth."
There are still few details on how the tax -- referred to as the "Tobin tax" after the Nobel laureate American economist James Tobin who first proposed it in 1972 -- would work and how its revenue would be used. The European Comission, the EU's executive branch, has proposed taxing trades in bonds and shares at a rate of 0.1 percent per transaction and taxing trades in derivatives at 0.01 percent. The 11 countries supporting the financial transaction tax were Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain -- all part of the euro zone. The countries still have to put their plans in writing and submit it to Brussels, according to European Tax Commissioner Algirdas Semeta. Imposing the tax across the entire EU is impossible without the support of more countries, however the EU treaty allows for "enhanced cooperation" in policy matters when at least nine states come together in agreement.Read the full story here.
Labels:
Euro Collaps,
Eurobonds,
Eurogeddon,
Tobin Tax
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