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Germany ready to impose financial transaction tax

The Local · 13 Oct 2011, 09:23

Published: 13 Oct 2011 09:23 GMT+02:00

Asked about financial market regulation, Schäuble said late Wednesday: "Of course it would be better on a global level and if it doesn't work at a global level, then at a European level, and if that doesn't work, then at a national level. That goes also for a tax on financial transactions."

In September, Europe went ahead with landmark proposals to tax the financial sector, ignoring US opposition in a move that also provoked grumblings in London which fears capital flight from the City.

The idea of a tax on financial market transactions has been pushed hard by German Chancellor Angela Merkel and French President Nicolas Sarkozy. The plan will likely be discussed at a summit of all 27 European Union heads of state and government at an October 23 summit, and also be put to a summit of G20 leaders in Cannes on November 3-4.

European Commission president Jose Manuel Barroso has said the tax could generate around €55 billion ($76 billion) a year.

Speaking to members of Merkel's conservative Christian Democrats, Schäuble also insisted that Greece's debt needed to be reduced to a more sustainable level.

"If Greece's debts are not sustainable in the long-term - and it seems that they are not - they need to be reduced to make them sustainable and that's what we have been discussing in recent days," he said. "I know that the markets do not like that, but there is no alternative."

Story continues below…

He added that private investors must take heavier losses in a second bailout plan for Greece, without mentioning a level for such a write-down, as speculation swirls of a "haircut" as high as 60 percent.


The Local (news@thelocal.de)

Your comments about this article

10:03 October 13, 2011 by Foreign interest.
I think that not one sane country in the entire world would join basket case Europe or tie their sovereign tax powers to any agreement whatsoever on this discredited tax. Independent nations have complex tax systems of their own, they certainly don't want forceful European leaders telling them how to run their internal business.

This ridiculous tax would flow down to pension funds, businesses, food costs, families, diffuse liquidity and capital lending capabilities and it would drive German financial businesses to welcoming places like Singapore, Hong Kong, China, Australia, USA, UK, Canada and others just waiting for the fatal error of judgment. German leadership has painted itself into a stupid corner on this.

From what I read, the G20 completely and strongly rejects this out-dated tax idea and their finance ministers do not like being continually force-fed nonsensical demands by Barroso, Merkel, Schauble and Sarkozy etc.

The European countries that do not want to get caught up in a dangerous tax that destroys their financial centers such as Russia, Sweden, Ireland, Checoslovakia, Netherlands etc. etc. should strongly, unambiguously fend off those who wish to to strip them of their sovereign independence.

I feel sorry for good German people who are at the mercy of a bunch of temporary tyrannical politicians who have no foresight.
10:30 October 13, 2011 by cambiste
Switzerland will be an interesting option for relocating EU financial companies.
12:04 October 13, 2011 by ChrisRea
@ Foreign interest.

You don't have the slightest idea about this subject, do you? The last time G20 discussed about taxing financial institutions was in 2010, in Toronto. The decision was that financial institutions would be required to contribute to recover costs from the financial sector reform, and each government would decide the way the contributions would be collected.

Your reference to Checoslovakia (sic!) shows that it is rather you that is outdated.
13:44 October 13, 2011 by Foreign interest.
Chris, if you want to be personal, then I would unwillingly return the favour - tenfold. (My apology for Czech typo). I will excuse your ignorance, because obviously you haven't kept up with repeated leadership statements since Toronto.

Read the foreign news. Obviously you know nothing about powerhouse Asia and their stated objections. Add Japan to the list of "No way Jose". Mr Barroso's unwanted pressures in that region since Toronto have been viewed as domineering. Obviously you don't keep abreast of international leaders' statements, or you would know that since 2010, the tax has been resoundingly rejected at consecutive Finance Minister meetings. Get it?

Do try to keep up dear.
18:14 October 13, 2011 by ChrisRea
@ Foreign interest.

I see that you fail to point out a recent official statement of the G20 (or the meeting of the finance ministers if you want) saying that they oppose the tax. It is understandable, as there was no such statement.

Instead, you refer to some isolate opinions coming within some countries from G20. But UK already has such a tax since 1986 (Stamp Duty Reserve Tax, working exactly as in the EU proposal) and Gordon Brown advised the other leading countries to move towards a global bank tax. France and Germany are clear supporters of the tax (they are the ones requesting it at EU level). The European Commission itself advocates for this tax (EU is the G20 member with the highest GDP and GDP/capita). Brazil already has positive experience with their bank transaction tax.

Outside G20, Spain and Belgium also support the idea and ask other countries to adopt such a tax. Austria follows suit. This are only some of the countries that support the tax.

So I am still waiting for the tenfold relevant reply.
04:01 October 14, 2011 by nemo999
How about that a self inflicted double tap to the German Economy, Head and Groin.
11:53 October 14, 2011 by siba
unbelievable that anyone can still be against this tax on financial transactions... there is an urgent need to regulate the financial market. this is just a very first and very mild mean. everyone sees where we have got without regulations... with this tax the amount of many fast transactions are reduced and the public profits from a bit more urgently needed tax money!
13:00 October 14, 2011 by snowey
This is all " pie inthe sky. "The British who control two thirds of financial transactions in the EU wont accept it & will veto any such measures.
15:54 October 14, 2011 by cambiste
@ChrisRea I have no wish to provoke an angry response but I think I should point out that the stamp duty tax to which you refer only applies to purchases of equities The problem with a transaction tax is that it would hit hard in particular on intra day fx trading which has high volumes .Gordon Browns enthusiasm for a bank tax(which has some merit) was not for a transaction tax but probably related to balance sheet size although I do not think he was specific.
23:52 October 14, 2011 by derExDeutsche
in the USA there is a Proposal to instate a '9-9-9' Flat Tax Rate.

In Europe and @ OccupyWallSt It is a 'Mine-Mine-Mine' Tax Rate.
14:03 October 15, 2011 by wenddiver
Yeh, more new taxes! Let's tax ourselves to prosperity.
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