Occupy EU: Proposed Financial Transaction Tax 'Political Project,' Designed to Punish Banks

Occupy EU: Proposed Financial Transaction Tax 'Political Project,' Designed to Punish Banks

Europe’s finance ministers Saturday made another effort to achieve a breakthrough on a disputed financial transactions tax, as Germany unveiled a plan to bring on board a skeptical Britain.

Ministers entering the second of a two-day meeting here expressed cautious support for a proposal issued by German Finance Minister Wolfgang Schaeuble to introduce a tax only on trade in company shares before broadening it out.

Acknowledging that resistance from several countries had delayed the tax, proposed by the European Commission in September 2011, which aims to make the financial sector pay for the crisis, Schaeuble proposed an “intermediate step.”

Finland’s Finance Minister Jutta Urpilainen threw her country’s support behind the German plan, as did her French counterpart Francois Baroin.

Schaeuble’s proposal is “wise, it is supported,” Baroin told reporters as he entered the meeting.

In a bid to break down London’s resistance, Berlin’s plan is based on existing taxes in Britain, which levies a stamp duty, and in France.

The Commission’s proposal — strongly supported by nine countries, including European power couple France and Germany — also aims to tax trading on complex financial instruments such as bonds and derivatives.

But Britain, home to 80 percent of Europe’s finance industry, has warned that it would prompt investors to flee the 27-nation bloc.

Despite the opposition, Baroin stressed the “determination” of the nine countries backing the introduction of a broader tax, describing it as “an essential political project for us.”

The tax aims to make the financial services industry pay its way in the future after banks especially benefited heavily from taxpayer bailouts when the mortgage meltdown in the United States sparked the 2008 global financial crisis.