Germany will work with a core group of European Union countries on introducing a financial transactions tax, its Finance Minister said on Friday, after efforts to get an agreement among all 27 EU countries fell short.
Wolfgang Schaeuble said 10 countries were prepared to use an EU process known as “enhanced co-operation” to push ahead with developing the tax, which Britain and other states, including some in the euro zone, oppose.
Enhanced co-operation requires at least nine EU countries to agree to work on a proposal. France, Italy and Spain are all behind Germany with the initiative, German Chancellor Angela Merkel said after a meeting with her counterparts in Rome.
Revenue from such a tax, which some analysts estimate could raise more than €50-billion ($63-billion U.S.) a year depending on the number of countries that participate, could be used to finance initiatives such as a fund to wind down bad banks.
“My impression is that quite a number of member states strongly support the proposal of an FTT [Financial Transactions Tax] in principle,” Mr. Schaeuble said after a meeting of EU finance ministers in Luxembourg. “We should give it a try.”
Denmark, which holds the rotating presidency of the EU, has tried for months to broker an agreement on an FTT but acknowledged on Friday that it would not be possible to do it among all 27 countries, given the divisiveness of the issue.
“What was promising was that a number of countries expressed interest in going forward with enhanced co-operation,” said Margrethe Vestager, Denmark’s Minister for Economic Affairs, who added that Mr. Schaeuble’s mention of 10 countries was about right.
“If there are nine, the [European] Comission can come up with a new proposal. Nine or more countries have expressed interest in enhanced co-operation,” she said.
So far, the debate about such a tax has centred on a blueprint written by the European Commission for a tax on stocks, bonds and derivatives trades from 2014 that its own research said could raise up to €57-billion a year.
Spain’s Economy Minister said his country stood firmly behind the proposal. “We are determined to start the enhanced co-operation,” Luis de Guindos told reporters.
Austria also supports the proposal.
But many ministers were critical of the idea, with some signalling that they could even challenge a smaller group of countries introducing such a tax if it negatively affected those not participating.
“We are not convinced of the case,” Michael Noonan, Ireland’s Finance Minister, told the meeting. “The proposals being made are not acceptable to us in particular if applied to fewer than 27.”