MEPs have today voted to press on with plans to introduce an EU-level financial transactions tax (FTT), even if it is alone in doing so, by adopting a resolution on innovative financing methods at global and European level
Meeting this week for their monthly plenary session in Strasbourg, the European Parliament today backed the idea of introducing a unilateral FTT across the European Union's 27 member states, one measure included in the Podimata report adopted with 529 votes in favour, 127 against and 19 abstentions
The adopted resolution says the EU should push for a global transaction tax but, "failing that, the EU should implement a financial transaction tax at the European level as a first step
", adding "the Commission should swiftly produce a feasibility study and come forward with concrete legislative proposals
In addition to the FTT, it also covered areas including Eurobonds, a carbon tax, and ensuring EU countries deliver on providing development aid, but it is the financial transactions tax that will make the headlines due to the split of opinions within the chamber.
Socialist MEPs believe an FTT, often referred to as a 'Robin Hood' tax or a Tobin tax
after the American economist who promoted it during the 1970s, would put an end to "tax injustice
" and be an "important tool to tackle excessive risk-taking" in the banking system. But on the other side of the political spectrum, some members of the majority EPP group as well as the ECR and EFD groups- which includes the UK Conservatives and UKIP MEPs - have condemned the idea saying it will redirect tax revenue in order to fund EU "pet projects
Responding via his Twitter account after learning the result of the vote, UKIP leader Nigel Farage said the EU going it alone with an FTT would be "financial kamikaze
", and even the European Commissioner for Taxation Algirdas Semeta had urged MEPs not to reach a fixed position until the Commission had published the result of its impact assessment study in the summer.
The idea has also raised doubts amongst members of the liberal ALDE grouping, with Swedish MEP Olle Schmidt saying in the debate on the report last night (7th) that an FTT would only work if it was global. To support his argument he reminded MEPs that a Swedish FTT in the 1980s led to "many financial services institutions departing for London
However, Greek socialist MEP Anni Podimata
, the report's author, says that an EU FTT levied at just 0.05% could raise in excess of €200 billion per year
, and in addition it could ensure that the financial services sector makes a significant contribution towards the cost of recovering from the banking crisis.
In what she calls a "double dividend
", Ms Podimata told the plenary that as well as generating more funds for the EU, it would also make the financial sector safer, make society greener, and discourage speculative trading by making it more costly.
While managing to get the report adopted with such a large majority represents somewhat of an achievement, another large hurdle remains before any such tax of financial transfers takes shape: getting all 27 EU heads of state to agree…