EU finance tax scheme stalled
on 22/06/2012 16:32:39
Just nine out of 27 countries were ready to support it, raising the prospect the tax will be implemented in the end only by a subset of EU countries.
The impasse over the proposal by the European Commission is the latest reflection of the difficulty of getting European politicians to agree to any single plan, even as they wrestle with a bigger, more immediate problem: forging a unified plan to contain the debt crisis.
With the Netherlands and Britain unalterably opposed to the tax proposal, finance ministers from the nine countries that endorsed the idea - including Germany, Greece, Poland, Italy and Austria - said they still wanted to forge ahead and hoped that some countries who are still undecided would join them later.
"I will not allow this project to die," Austrian Finance Minister Maria Fekter said on her way into the Luxembourg meeting. In open debate, she threatened that Austria would not participate in one of Europe's bailout funds, the European Stability Mechanism, if work on the tax were not implemented.
The proposed financial transactions tax would charge banks 0.1% of the value of sales of stocks or bonds, and 0.01% per derivative contract.
Adoption of the tax was not put to a vote and the debate ended without a clear result, as EU lawyers described a painstaking procedure for countries to negotiate a treaty when an idea deadlocks.
At least nine countries must request "enhanced cooperation" - essentially a side agreement applying only to them and not to other EU countries. That request has not yet been made.
UK Chancellor George Osborne said such a tax would hurt the European economy as financial transactions were routed to countries outside the union.
"I would have thought we want to be attracting business rather than the other way around," he said.
German Finance Minister Wolfgang Schaeuble said he would prefer that all 27 EU member countries adopt the tax, but he hoped it would be possible to pursue it with fewer. "We emphatically want to move ahead," he said