EU Financial Transactions Tax Talks Kicked to End 2017

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By Joe Kirwin

A pivotal meeting of 10 European Union finance ministers on a financial transactions tax, due to take place July 10, has been postponed until the end of 2017 at the earliest.

The 10 EU countries officially pursuing the financial transactions tax are Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia, and Spain.

Further fuelling doubts that the EU tax will come to fruition any time soon, the cancellation occurred as countries led by France and Germany have put the talks on hold as they try to use Brexit to lure London-based banks and financial services industries to move to continental Europe, EU officials told Bloomberg BNA.

“If you are trying to persuade firms in the City of London to move to Frankfurt, it is not such a good idea to be talking about imposing an FTT,” Hardy Boeckle, a spokesman from the Brussels-based German representation to the EU, told Bloomberg BNA in a July 7 interview.

Boeckle also noted that German national elections are due to take place at the end of September.

It may be the end of November “by the time the elections are concluded and a government is formed,” Boeckle said. “So a ministerial meeting of the 10 FTT ministers before December would be highly unlikely.”

Third Cancellation

The decision to postpone the July 10 ministerial meeting is the third cancellation in three months. French elections were cited as the reason for the previous two cancellations because the new French government, led by President Emmanuel Macron and his centrist political party En Marche, requested time to decide whether to support the FTT.

Earlier in the year, Austrian Finance Minister Hans Joerg Schelling, who is chairing the EU FTT talks, announced an agreement had been reached on the modalities for the levy. However, he also said it was now up to the governments of each of the 10 countries to decide whether to move ahead.

The 10 EU countries are using a special legislative procedure known as “enhanced cooperation” to push through the FTT.

The most recent postponement triggered prompt criticism from German European Parliament member Sven Giegold, who has worked to get an FTT implemented in the EU for more than a decade.

“This lack of will to move forward is not because of small countries but it is because of France and Germany,” Giegold told Bloomberg BNA in a July 7 interview. “The German government is split on this issue but it will have to face voters in September. In the case of Macron, he has to watch his reputation. He was an investment banker.”

To contact the reporter on this story: Joe Kirwin in Brussels at correspondents@bna.com

To contact the editor responsible for this story: Penny Sukhraj at psukhraj@bna.com

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