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Europe aims for breakthrough on financial transactions tax

March 31, 2012

German Finance Minister Wolfgang Schaeuble.—Reuters Photo

COPENHAGEN: Europe's finance ministers Saturday made another effort to achieve a breakthrough on a disputed financial transactions tax, as Germany unveiled a plan to bring on board a sceptical Britain.

Ministers entering the second of a two-day meeting here expressed cautious support for a proposal issued by German Finance Minister Wolfgang Schaeuble to introduce a tax only on trade in company shares before broadening it out.

Acknowledging that resistance from several countries had delayed the tax, proposed by the European Commission in September 2011, that aims to make the financial sector pay for the crisis, Schaeuble proposed an “intermediate step.”

“This would entail a tax payable on all transactions involving shares of corporations listed on a stock exchange, with the tax levied according to the place where the corporation has its registered office,” said the German plan.

“Negotiations on the Commission's proposal for a common system of financial transaction tax should not be abandoned or postponed,” concluded the proposal, obtained by AFP.

Finland's Finance Minister Jutta Urpilainen threw her country's support behind the German plan, as did her French counterpart Francois Baroin.

Schaeuble's proposal is “wise, it is supported,” Baroin told reporters as he entered the meeting.

“We need to advance on this topic,” added the minister, as talks have got bogged down for months.

In a bid to break down London's resistance, Berlin's plan is based on existing taxes in Britain, which levies a stamp duty, and in France.

“There are stamps duties for example in France and the UK. That is less costly for the economy and would not have a detrimental effect on the financial market,” said Swedish Finance Minister Anders Borg.

“If we want to find a solution for all the EU countries we'll have to be pragmatic and also try to have a solution that could be acceptable in London,” said Borg.