Currently 11 European countries have signalled their intent to press ahead with an FTT. The countries are Germany, France, Belgium, Austria, Slovenia, Portugal, Greece, Italy, Spain, Estonia and Slovakia. Nine are needed for enhanced cooperation to be used. Vice- director of the European Parliament, Anni Podimata (S&D) assures that this will contribute to shifting the burden from the citizens to the financial industry – which has not yet contributed its fair share to the cost of the crisis.
Anni Podimata welcomes the plan to press ahead: “I welcome the decision of 11 Member States to introduce a Financial Transaction Tax under enhanced cooperation. It is a socially fair tax, an indispensible part of a complete and coherent solution to exit the crisis.”
The EU Commission in 2011 proposed a directive aimed at introducing an EU-wide FTT, but a Council discussion on 22 June this year revealed insufficient support for the proposal. EU Parliament has been calling for an FTT for over two years. If this uptake succeeds, it will contribute to shifting the burden from the citizens to the financial industry – which has not yet contributed its fair share to the cost of the crisis. FTT, better known as “Tobin tax”, was proposed by economist and Nobel-prize winner James Tobin proposed in 1972. The Tobin tax was developed with the intention of penalizing short-term currency speculation to prevent financial transactions disguised as trade. Rather than a consumption tax paid by consumers, the Tobin tax was meant to apply to financial sector participants as a means of controlling the stability of a given country’s currency. James Tobin was honoured with Nobel Prize in Economics in 1981. The idea of Tobin Tax spread as a symbol for more social justice on capitalist financial market. “We will continue pushing to bring on board the greatest possible number of Member States”, said Podimata yesterday. (sources: EP New, investopedia, Europeans for financial reform)