GO
Loading...

Senior German lawmaker says financial transaction tax unlikely

Saturday, 9 Nov 2013 | 7:05 AM ET

BERLIN, Nov 9 (Reuters) - An influential regional leader in Chancellor Angela Merkel's conservative party said he does not believe a financial transaction tax (FTT) will be enacted in Germany even though coalition negotiators have agreed to push for the tax.

Merkel's CDU and the Social Democrats said last Wednesday they agreed to renew a push for an FTT, which would tax banks in 11 EU states about 35 billion euros ($45 billion) a year, partly in return for taxpayers' help over the financial crisis.

They face stiff opposition from other EU states, and EU lawyers say the FTT exceeds member states' jurisdiction for taxation, could damage non-participating EU countries and would obstruct free movement of capital and services in the bloc.

"I don't see us introducing a financial transaction tax," said Hesse state premier Volker Bouffier, a deputy party leader to Merkel, in an interview with Die Welt newspaper on Saturday. His state includes Germany's financial capital of Frankfurt.

"A unilateral move with that would have devastating consequences for the financial centres in the Rhine/Main River regions," he said. "And it's not very likely that there will be an international resolution (for a transaction tax)."

Banks have lobbied furiously against the plan, which may be scaled back by lowering the standard tax rate on transactions from the 0.1 percent laid out in the original blueprint drafted by Brussels, and by introducing it more gradually.