Local view for "http://purl.org/linkedpolitics/eu/plenary/2012-05-23-Speech-3-009-000"
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"en.20120523.3.3-009-000"2
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"Mr President, on behalf of the Danish Presidency I would like to thank Parliament for its continued interest in this important issue of taxation of the financial sector in the follow-up to the crisis. I am aware of Parliament’s keen and long-standing interest in this matter.
Despite the comprehensive work that has been done and the good progress achieved to date, honourable Members will be well aware that not all Member States are able to support the Commission’s proposal. I note that adoption of the proposal requires unanimity. At the Ecofin Council, it has been decided that we should follow a two-track approach: while discussion on the basis of the Commission’s FTT proposal would continue, exploring room for possible compromise, we would look, at the same time and in the light of the Member States’ various points of view, at alternatives with regard to both the substantive and the procedural aspects of an FTT and with regard to other tax instruments.
This approach is designed to facilitate progress on the matter. One alternative, for instance, could be a financial activity tax applied by some Member States. Another could be a transaction tax that builds on some elements of stamp duty. While work along these lines must continue, there is also a wish among Member States in the Council to clarify matters and to reach a conclusion on this issue.
I am looking forward to hearing your views, which will provide useful input for the Danish Presidency as it seeks to take forward the work in the Council. The Presidency will submit a report on this issue for the June Ecofin Council. This will give ministers an opportunity to discuss a way forward and will provide guidance, as to future options, for the incoming Cypriot Presidency.
I would like to use this opportunity to thank Parliament and the rapporteur for their constructive cooperation on the ongoing work in the EU to further this discussion and to strengthen financial regulation in the light of the crisis. One of the main priorities of the Danish Presidency is to strengthen financial regulation so that future crises can be avoided. I sense that this work is accorded high priority by all the European institutions, including Parliament, and all the parties involved. I thank you for your attention.
Today, we will discuss a possible common solution for taxation of financial transactions at EU level. The subject was highlighted in a resolution adopted in March 2010 on ‘financial transaction taxes – making them work’, as well as in a subsequent resolution in February 2011, which looked at innovative financing at global and European level. There have been many other resolutions on the wider issues of the financial crisis that have addressed this subject, and today we are debating a report by Ms Podimata on the Commission proposal for a common system for taxing financial transactions within the EU.
Members of this House will also be aware that the Council has been taking the issue of a financial transaction tax (FTT) very seriously. The Council fully agrees with Parliament on the need to ensure a fair contribution from the financial sector in the light of the huge costs and risks inflicted on Member States’ public finances by the financial crisis.
Before the Commission presented its proposal on an FTT, various options for further taxing of the financial sector were discussed extensively in the Council High Level Working Party on Taxation, as well as at ministerial level in the Economic and Financial Affairs (Ecofin) Council. Broadly speaking, the Council discussions have reflected different views from Member States as to which tax instrument should be given priority.
At the end of last year, the Commission submitted to the Council a proposal for a directive on an FTT. The Polish Presidency announced a political discussion and a technical analysis of the proposal. This work was subsequently taken over by the Danish Presidency.
Given the importance of the issue and the interest in it, the Danish Presidency has engaged in an intense programme of work. We have accommodated the wish expressed by some Member States for a speedy process. There have been extra meetings at a technical level, as well as political-level discussions both at the Ecofin Council in mid-March and at the informal Ecofin meeting in Denmark at the end of March. These discussions have enabled us to make progress, and I expect we will have the issue on the agenda at the June Ecofin meeting.
The Presidency concluded the first technical examination of this matter in March and, at the time, identified a number of issues that will require further attention, some of which are also of concern to Parliament. Among these are the risks of reallocation of financial activity outside the EU, and tax avoidance issues, if the EU were to move forward with its own FTT. The design of the tax should, to the greatest possible extent, accommodate such concerns.
Another question is whether such a tax should allow for possible exemptions – for pension funds, etc. That would naturally impact on its revenue potential and would lead to other competition-related challenges.
Then there is the impact of the FTT on growth and jobs, on banks’, companies’ and households’ borrowing costs, and on the functioning of financial markets in general. Not all aspects and possible effects of the tax are sufficiently understood, nor is there agreement on answers to all the questions that could be raised. It is clear that there are challenges to be overcome if the FTT is to be made workable."@en1
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