The European commissioner for tax has made a pleading argument to Parliament to push through the implementation of the financial transaction tax (FTT).
The commissioner, Algirdas Šemeta, said that, despite the tax having a “majority support” from the public and Parliament, the leaders of the 11 member states have become susceptible to vested-interest groups.
“You have had the courage and conviction to transcend individual differences,” he told MEPs. “I find myself wondering why the 11 member states have not been able to do the same.”
Šemeta said the tax represented the union’s ambitions of fairness, responsibility and a strong single market and claimed Europe needed to reconnect with its citizens.
He argued that the FTT was a highly popular initiative in which Europeans believed.
“We all know the broad-based FTT has a lot of supporters – this is something that should not be overlooked in the avalanche of lobby-driven criticisms,” he said.
“But strong vested-interest groups have worked tirelessly to impede progress, over-estimating the threats and negative impact of this tax. And this has created some apprehension amongst the member states.”
Members of the European Union had been split over the implementation of the FTT, also known as a ‘Tobin Tax’ after Nobel economist James Tobin.
At an initial vote, UK prime minister David Cameron used the country’s veto, going against an EU-wide implementation.
The 11 euro-zone countries remained on course for implementation, while the UK launched a legal challenge with the European Court of Justice.
Research against the FTT has suggested significant negative impacts on investors, including pension schemes.
The City of London Corporation, in a report, claimed it could increase the cost of UK Gilt issuance by £4bn (€4.8bn) alone.
The Dutch finance minister Jeroen Dijsselbloem also waded into the argument, suggesting the tax would cost pension schemes in the Netherlands €250m a year, while brokerage firm ICAP said the tax ran counter to the EU’s freedom of movement of capital.
Šemeta remained positive and called on MEPs to speed up the process by compromising with member states.
He said Parliament already presented viable concessions to the tax, including the removal of the tax on real economy transactions, intra-group transactions and within a network of de-centralised banks.
However, he bemoaned member states’ lack of interest in the ideas.
He told Parliament and supporters of the FTT that they must adapt to the reality and discover what could be achieved, over the pursuit of the impossible.
Šemeta added that the Commission would allow the gradual implementation of the tax, if the member states were more comfortable with the concept.
However, he said: “Many issues require a strong political steer in order to be resolved – and, unfortunately, that steer has been lacking up to now.”