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BackWhen it comes to the question whether the European Union should finally introduce the long overdue tax for speculators, also called Financial Transaction Tax, one can definitely count on the support of the representatives of the citizens in the European Parliament. It was for the second time this week that its supporters in Strasbourg voted with broad cross-party majority in favour of a speedy and comprehensive taxation of financial transactions. In doing so, the Parliamentarians send a clear signal to the Member States: It’s high time you found a solution; the citizens expect that of you!
It was a long battle with many obstacles. Many oppose the taxation of financial transactions, which so far have been completely exempt from tax. Its opponents do not only include the financial industry and its lobby, but also Member States such as Great Britain, Luxemburg, Sweden, the Netherlands and Denmark who want to protect their national financial centres.
Last year, under the aegis of the Greek Social Democrat Anni Podimata, the European Parliament had already voted with a broad majority for Europe to adopt a pioneering role with regard to the introduction of the Financial Transaction Tax. With good reason. The tax does not only provide the budgets of the Member States with an urgently needed income, it also helps to restrict short-term speculations, which have no positive impact on the economy. The support of the European Parliament for this ground-breaking project, which was not least made possible by a broad European citizens' campaign, which to this day is carried by AK and ÖGB and other partners from trade unions, politics and civil society, was an important step towards making speculators taking a share in the costs of the financial crisis, which after all was caused by them. Only a few years ago, elites and the media ridiculed the Financial Transaction Tax as being a utopian idea.
The pressure of the citizens and the European Parliament, combined with the support by some European governments, including Austria right from the start, convinced the European Commission, which for a long time dragged its feet, to finally present a proposal for a Directive. From an employee’s point of view, the proposal of the Commission might not come fully up to expectations; however, on the whole, the proposal of the Commission has to be welcomed.
Unfortunately, however, it is the case that the decision to introduce a European tax is exclusively made by the Member States. Pressurized by financial lobbyists, some of them, in particular the British and their allies, do everything to thwart an agreement at European level. That is why the negotiations between the Member States concerning the proposal of the Commission are not only time-consuming but also frustrating sometimes.
What can be done if the Member States are unable to secure unanimous agreement? Shall the project, which, according to surveys is supported by a broad majority of European citizens, just be buried? This would probably be the most pleasant solution for the opponents of the tax. But as desirable it might be to have all 27 Member States on board, not all of them are needed. Hence, the idea that those countries in the EU who are not only driven by their financial lobbies, introduce the tax and that the ditherers and blockers could follow later - or not. This is called “enhanced cooperation” in EU jargon.
Even though with regard to tax issues, the European Parliament has no legally binding possibilities to influence the Member States, it must at least be heard. This took place in Strasbourg this week, where the EU Parliamentarians formed a political opinion during their plenary session on the proposal of the Commission concerning the Financial Transaction Tax. And this political opinion cannot simply be ignored by the Member States.
The opinion of the representatives of the people was mainly positive. The MEPs welcomed the ideas of the Commission and only a few had change requests and political recommendations. One of the most important: if, due to the fact that the British, the Swedes, the Dutch, the Luxembourgers and the Danes are putting the brakes on, the 27 Member States cannot come to an agreement, the countries who are in favour, shall be able to introduce the tax without them. Another demand of the MEPs: the negotiating Member States shall try everything to get as many States on board as possible. However, not at any price - it must not happen that the proposal of the Commission is weakened by dozens of exemptions, which would reduce it to a caricature.
An important request, which unfortunately was undermined by the MEPs themselves. In contrast to the European Commission, they are demanding that pension funds - a business worth billions - do not have to pay Financial Transaction Tax. Public scaremongering and the lobby offensive of the pension funds obviously had the desired effect. Nevertheless, from the point of view of employees this is a serious mistake: after all, the idea was to reward pension funds, which are based on long-term investments and to rein in those, which, looking for above-average profits, take particularly high risks. The Financial Transaction Tax would have been an important step in this direction.
However, to compensate for this caving in to please the funds industry, Parliament has accepted a new demand, which is of great significance. Hence, it requests that the Financial Transaction Tax will also have to be paid on currency speculations. Due to the fact that this can only be described as a multi-billion business, this is a courageous proposal, which the Commission did not dare to follow. Unfortunately, it has to be expected that the Member States - with the support of the European Central Bank - will simply ignore this demand of the Parliamentarians.
The idea of the Luxembourg Conservative MEP Astrid Lulling shows her as being rather out of touch with public opinion. Her last minute thought included the wish to also exempt investment funds from paying Financial Transaction Tax. After all, due to the preferential tax treatment they enjoy in Luxembourg, they find it a particular pleasant place where they are represented en masse. A sad example, which shows how even MEPs give priority to national interests over the overall European interest.
In the end, the report of Anni Podimata was accepted with a large majority. 487 MEPs were in favour, 152 against and 46 abstained. All Austrian MEPs, with the exception of Ewald Stadler, voted for a European Financial Transaction Tax. A strong signal to the Finance Ministers, to deliver the results the citizens expect of them when they meet again in June!
Last year, under the aegis of the Greek Social Democrat Anni Podimata, the European Parliament had already voted with a broad majority for Europe to adopt a pioneering role with regard to the introduction of the Financial Transaction Tax. With good reason. The tax does not only provide the budgets of the Member States with an urgently needed income, it also helps to restrict short-term speculations, which have no positive impact on the economy. The support of the European Parliament for this ground-breaking project, which was not least made possible by a broad European citizens' campaign, which to this day is carried by AK and ÖGB and other partners from trade unions, politics and civil society, was an important step towards making speculators taking a share in the costs of the financial crisis, which after all was caused by them. Only a few years ago, elites and the media ridiculed the Financial Transaction Tax as being a utopian idea.
The pressure of the citizens and the European Parliament, combined with the support by some European governments, including Austria right from the start, convinced the European Commission, which for a long time dragged its feet, to finally present a proposal for a Directive. From an employee’s point of view, the proposal of the Commission might not come fully up to expectations; however, on the whole, the proposal of the Commission has to be welcomed.
Unfortunately, however, it is the case that the decision to introduce a European tax is exclusively made by the Member States. Pressurized by financial lobbyists, some of them, in particular the British and their allies, do everything to thwart an agreement at European level. That is why the negotiations between the Member States concerning the proposal of the Commission are not only time-consuming but also frustrating sometimes.
What can be done if the Member States are unable to secure unanimous agreement? Shall the project, which, according to surveys is supported by a broad majority of European citizens, just be buried? This would probably be the most pleasant solution for the opponents of the tax. But as desirable it might be to have all 27 Member States on board, not all of them are needed. Hence, the idea that those countries in the EU who are not only driven by their financial lobbies, introduce the tax and that the ditherers and blockers could follow later - or not. This is called “enhanced cooperation” in EU jargon.
Even though with regard to tax issues, the European Parliament has no legally binding possibilities to influence the Member States, it must at least be heard. This took place in Strasbourg this week, where the EU Parliamentarians formed a political opinion during their plenary session on the proposal of the Commission concerning the Financial Transaction Tax. And this political opinion cannot simply be ignored by the Member States.
The opinion of the representatives of the people was mainly positive. The MEPs welcomed the ideas of the Commission and only a few had change requests and political recommendations. One of the most important: if, due to the fact that the British, the Swedes, the Dutch, the Luxembourgers and the Danes are putting the brakes on, the 27 Member States cannot come to an agreement, the countries who are in favour, shall be able to introduce the tax without them. Another demand of the MEPs: the negotiating Member States shall try everything to get as many States on board as possible. However, not at any price - it must not happen that the proposal of the Commission is weakened by dozens of exemptions, which would reduce it to a caricature.
An important request, which unfortunately was undermined by the MEPs themselves. In contrast to the European Commission, they are demanding that pension funds - a business worth billions - do not have to pay Financial Transaction Tax. Public scaremongering and the lobby offensive of the pension funds obviously had the desired effect. Nevertheless, from the point of view of employees this is a serious mistake: after all, the idea was to reward pension funds, which are based on long-term investments and to rein in those, which, looking for above-average profits, take particularly high risks. The Financial Transaction Tax would have been an important step in this direction.
However, to compensate for this caving in to please the funds industry, Parliament has accepted a new demand, which is of great significance. Hence, it requests that the Financial Transaction Tax will also have to be paid on currency speculations. Due to the fact that this can only be described as a multi-billion business, this is a courageous proposal, which the Commission did not dare to follow. Unfortunately, it has to be expected that the Member States - with the support of the European Central Bank - will simply ignore this demand of the Parliamentarians.
The idea of the Luxembourg Conservative MEP Astrid Lulling shows her as being rather out of touch with public opinion. Her last minute thought included the wish to also exempt investment funds from paying Financial Transaction Tax. After all, due to the preferential tax treatment they enjoy in Luxembourg, they find it a particular pleasant place where they are represented en masse. A sad example, which shows how even MEPs give priority to national interests over the overall European interest.
In the end, the report of Anni Podimata was accepted with a large majority. 487 MEPs were in favour, 152 against and 46 abstained. All Austrian MEPs, with the exception of Ewald Stadler, voted for a European Financial Transaction Tax. A strong signal to the Finance Ministers, to deliver the results the citizens expect of them when they meet again in June!