Merkel offers ‘trader tax’ for Fiscal Pact support

The German government is planning to introduce the much mooted and sometimes feared "financial transaction tax" by another name – to win opposition support for the Fiscal Pact, a press report said on Tuesday.

Merkel offers 'trader tax' for Fiscal Pact support
Photo: DPA

The Rheinische Post newspaper said on Tuesday, the three leaders of the coalition government – Chancellor Angela Merkel of the Christian Democratic Union, Free Democratic Party leader Philipp Rösler, and Christian Social Union leader Horst Seehofer – agreed on Monday to launch a working group to look into ways to tax the financial markets.

The interdepartmental team – including officials from the chancellery, the finance ministry and the economy ministry – has been charged with coming up with a tax concept by June 13, when the government and opposition will meet to discuss the EU fiscal pact.

Some kind of tax on the financial markets is to be part of the “growth package” that the government wants to finalize before the parliamentary summer recess.

Merkel is desperate for this package to present a clear and convincing strategy for re-starting the stuttering German and EU economies. Her government is hoping that it will help convince the opposition to support the Fiscal Pact.

The German financial daily Handelsblatt said the three governmental party leaders discussed measures to appease Germany’s centre-left opposition, particularly the Social Democratic Party (SPD).

SPD parliamentary faction leader Frank-Walter Steinmeier said at the weekend that his party would only support the Fiscal Pact if the cabinet made a “clear decision” to tax financial markets.

Merkel may need opposition support, because the coalition’s majority in the lower house of the German parliament, the Bundestag, is currently wafer thin and threatened by dissent over euro issues by CDU and FDP party rebels.

Reuters news agency reported that the “growth package” would include an increase of capital for the European Investment Bank (EIB), a re-allocation of EU money specifically to combat youth unemployment, and a more binding economic policy agreement in the eurozone.

Merkel is reported to have introduced the idea of a market tax at Monday’s meeting, and the FDP, traditionally a low-tax party, said it was not opposed in principle. But FDP parliamentary leader Rainer Brüderle warned that a financial transaction tax would not be a good idea, as it would inevitably, like a value-added taxes, eventually be passed on to the consumer.

The EU Fiscal Pact, which imposes tighter budgetary discipline on member states, was agreed earlier this year by all EU members except Britain and the Czech Republic, and was passed by a referendum in Ireland last week.

The Local/bk

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Sleep, seaside, potato soup: What will Merkel do next?

 After 16 years in charge of Europe's biggest economy, the first thing Angela Merkel wants to do when she retires from politics is take "a little nap". But what about after that?

Outgoing German Chancellor Angela Merkel briefly closes her eyes and smiles at a 2018 press conference in Berlin.
Outgoing German Chancellor Angela Merkel briefly closes her eyes at a 2018 press conference in Berlin. Aside from plans to take "a little nap" after retiring this week, she hasn't given much away about what she might do next. Tobias SCHWARZ / AFP

The veteran chancellor has been tight-lipped about what she will do after handing over the reins to her successor Olaf Scholz on December 8th.

During her four terms in office, 67-year-old Merkel was often described as the most powerful woman in the world — but she hinted recently that she will not miss being in charge.

“I will understand very quickly that all this is now someone else’s responsibility. And I think I’m going to like that situation a lot,” she said during a trip to Washington this summer.

Famous for her stamina and her ability to remain fresh after all-night meetings, Merkel once said she can store sleep like a camel stores water.

But when asked about her retirement in Washington, she replied: “Maybe I’ll try to read something, then my eyes will start to close because I’m tired, so I’ll take a little nap, and then we’ll see where I show up.”

READ ALSO: ‘Eternal’ chancellor: Germany’s Merkel to hand over power
READ ALSO: The Merkel-Raute: How a hand gesture became a brand

‘See what happens’
First elected as an MP in 1990, just after German reunification, Merkel recently suggested she had never had time to stop and reflect on what else she might like to do.

“I have never had a normal working day and… I have naturally stopped asking myself what interests me most outside politics,” she told an audience during a joint interview with Nigerian writer Chimamanda Ngozi Adichie.

“As I have reached the age of 67, I don’t have an infinite amount of time left. This means that I want to think carefully about what I want to do in the next phase of my life,” she said.

“Do I want to write, do I want to speak, do I want to go hiking, do I want to stay at home, do I want to see the world? I’ve decided to just do nothing to begin with and see what happens.”

Merkel’s predecessors have not stayed quiet for long. Helmut Schmidt, who left the chancellery in 1982, became co-editor of the weekly newspaper Die Zeit and a popular commentator on political life.

Helmut Kohl set up his own consultancy firm and Gerhard Schroeder became a lobbyist, taking a controversial position as chairman of the board of the Russian oil giant Rosneft.

German writer David Safier has imagined a more eccentric future for Merkel, penning a crime novel called Miss Merkel: Mord in der Uckermark  that sees her tempted out of retirement to investigate a mysterious murder.

German Chancellor Angela Merkel forms her trademark hand gesture, the so-called “Merkel-Raute” (known in English as the Merkel rhombus, Merkel diamond or Triangle of Power). (Photo by Tobias SCHWARZ / AFP)

Planting vegetables
Merkel may wish to spend more time with her husband Joachim Sauer in Hohenwalde, near Templin in the former East Germany where she grew up, and where she has a holiday home that she retreats to when she’s weary.

Among the leisure activities she may undertake there is vegetable, and especially, potato planting, something that she once told Bunte magazine in an interview in 2013 that she enjoyed doing.

She is also known to be a fan of the volcanic island of D’Ischia, especially the remote seaside village of Sant’Angelo.

Merkel was captured on a smartphone video this week browsing the footwear in a Berlin sportswear store, leading to speculation that she may be planning something active.

Or the former scientist could embark on a speaking tour of the countless universities from Seoul to Tel Aviv that have awarded her honorary doctorates.

Merkel is set to receive a monthly pension of around 15,000 euros ($16,900) in her retirement, according to a calculation by the German Taxpayers’ Association.

But she has never been one for lavish spending, living in a fourth-floor apartment in Berlin and often doing her own grocery shopping.

In 2014, she even took Chinese Premier Li Keqiang to her favourite supermarket in Berlin after a bilateral meeting.

So perhaps she will simply spend some quiet nights in sipping her beloved white wine and whipping up the dish she once declared as her favourite, a “really good potato soup”.