Germany cools on finance industry tax idea

Germany cools on finance industry tax idea
Photo: DPA
Germany will look for an alternative to the cross-border tax on financial transactions – backing away from the French-backed idea which has run into fierce opposition from the finance sector and European governments.

Speaking to public broadcaster SWR in an interview to be transmitted on Saturday, Finance Minister Wolfgang Schäuble appeared to back down from the financial transactions tax – known as the Tobin tax. He acknowleded it would be nigh on impossible to push through at a European level.

“Instead, I will now back equal alternatives, such as extended stock market tax and one which has the broadest possible backing,” Schäuble said.

The proposals for a cross-border tax on banks and other finance houses have hit stiff resistance from Britain, whose City of London is home to 80 percent of Europe’s finance industry, and Sweden.

The tax is aimed at making the money-men pay their way in the future after banks especially benefited heavily from taxpayer bailouts when the mortgage meltdown in the United States triggered the 2008 global financial crisis.

France and eight other countries – Austria, Belgium, Finland, Germany, Greece, Italy, Portugal and Spain – argue that the tax is necessary “to ensure a fair contribution from the financial sector to the costs of the financial crisis, but also to improve the regulation of markets.”


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