02.02.2011
10:00

European Parliament Debriefing: Financial Transaction Tax

Published in 
CEPS - Centre for European Policy Studies 1 Place du Congrès / Congresplein 1000 Brussels

VoteWatch.eu monthly debriefing in partnership with ECMI-CEPS

The introduction of an EU-wide tax on financial transactions is set to be a topic for discussion during the next months. In a non-legislative report on ‘innovative financing’ adopted in March by the EP, a wide majority asked for a tax on financial transactions of between 0,01 and 0,05% to be introduced in Europe. This proposition will be followed by several cost-benefit analyses carried out by the European Commission and discussions among member states. 

In an event organised by VoteWatch.eu in partnership with ECMI, Diego Valiante, Research Fellow, discussed the possible introduction of this tax with MEPs Anni Podimati and Danuta Hubner, rapporteur and shadow rapporteur for this report.According to the EP, the amount collected by this tax would reach 200 billion euros per year. While the report as a whole was adopted with a comfortable majority, one provision in particular brought fierce disagreement, namely, whether the EU should go ahead with this tax before its international partners do so. 

ECMI stressed the importance of clearly establishing which objective is pursued by this tax. Diego Valiante explained that the cause of the financial crisis did not lie in the number of transactions but rather in the level of leverage. He stressed the importance of putting the right instruments in place to solve imbalances. Valiante believes it would be very difficult to define the tax base, that is, provide a consistent definition of transaction. Further, he believes it is uncertain that a tax of this type would reduce volatility. Stronger supervision and better regulation of market manipulation were some of the alternatives proposed to the introduction of this tax.

Participants

  • Karel Lannoo, Director at ECMI and CEO at CEPS (Chair)
  • Anni Podimati, MEP and Rapporteur
  • Danuta Hubner, MEP and Shadow Rapporteur
  • Doru Frantescu, VoteWatch.eu
  • Diego Valiante, Research Fellow at ECMI-CEPS

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