Tomorrow will mark another milestone in the long meandering path towards a international financial transaction tax, otherwise known as the Tobin tax.
What exactly will happen? Well the European Commission, the EU’s executive arm, will approve a proposal that paves the way for an avande-garde of member states to agree their own Tobin regime. In EU jargon, it’s a proposal authorising “enhanced cooperation”.
Ironically the step forward will come in the shape of a legal admission of defeat, a formal acceptance that there is at present no consensus for a pan-EU levy, let alone enough for a global one.
It is largely a formality. But it means the 11 EU countries that want the levy will be one procedure closer to setting up their own Tobin tax. Such breakaway groups are considered a last resort under EU rules, so any enhanced cooperation must clear various legal hurdles, including proof that a pan-EU deal is impossible for now. Read more
Germany's Schäuble, left, and France's Moscovici sent the Tobin letters out this morning.
First, it was going to be a global financial transactions tax – known among the cognoscenti as the Tobin tax – agreed by the Group of 20 major economies, but the US wouldn’t go along. Then it was going to be an EU-wide levy among all 27 members of the bloc, but the UK and several Nordics disagreed.
That got whittled down to the 17 eurozone members, but the Dutch and Irish didn’t want it. So, starting today, a final push to find nine EU members who will sign up to the Tobin tax was launched by France and Germany, who sent letters around this morning to all EU finance ministries looking for takers.
Under the EU’s arcane rules, if nine sign up, Paris and Berlin can move ahead with “enhanced cooperation” – essentially a tool that allows a small subset of countries to agree on common policies and still stay within the EU’s legal system. But it’s not certain they’ll find even nine, EU diplomats said.
According to copies of two letters obtained by Brussels Blog – one to the European Commission, the other to national capitals – co-signatories Pierre Moscovici, the French finance minister, and Wofgäng Schauble, his German counterpart, are trying to gain support by arguing the tax is the financial sector’s contribution to eurozone crisis response. Read more