Financial-Transaction Tax Advances in EU
The European Union gave the green light for 11 countries that account for two-thirds of the bloc's economy to impose a small tax on trades in stocks, bonds and derivatives, The Wall Street Journal reported. If implemented as planned, the levy could transform financial-market flows in Europe, but many observers expect difficult negotiations ahead to diminish its impact. The European Commission, the EU's executive arm, had hoped to create a financial-transaction tax for all 27 EU member states. But that plan was blocked by the U.K., home to the City of London trading hub, and several other countries worried that it would lead investors to switch trades to the U.S. or Asia. Germany and France, eager to show their electorates that they could recoup some of the costs of the financial crisis from banks and other firms, decided to push ahead anyway. They persuaded Spain, Italy, Belgium, Estonia, Greece, Austria, Portugal, Slovenia and Slovakia to join in, and on Tuesday got a majority of EU states to allow them to proceed with the tax. Algirdas Semeta, the EU's taxation commissioner, called the deal a "major milestone" in European and global tax history. "For the first time ever, a financial-transaction tax will be applied at regional level," he said. "A bloc representing about two-thirds of EU [gross domestic product] will implement this fair tax together, answering the longtime calls of their citizens." Read more.