The 2011/10/10 at 09:46
Despite reticence from the financial lobby and the United Kingdom, the two countries France and Germany are pressing for a Europe-wide tax on financial transactions. On Friday 10 September, the two countries addressed a letter to the European Commission in which they unveil the contours of a tax on financial transactions. This letter, written by the French and German Ministers of Finance, François Baroin and Wolfgang Schäuble, follows declarations by Nicolas Sarkozy and Angela Merkel in favour of this tax on 17 August.
They thus called upon the members of the G20 to find an agreement. But conscious of the political difficulties awaiting them, Paris and Berlin are relaunching the file on a European level. In this way, if they fail to gain the support of their G20 partners in Cannes, at the start of November, they will fall upon the European Union, as a prelude, so they hope, to a later global consensus.
"We believe the European Union should lead the global mobilisation on this issue and we asked the Council Presidency to put it on the European agenda in the coming months," reads the letter. In addition, this Franco-German draft politically reinforces the proposal currently being formalised by the European Commission, to be unveiled at the start of October. François Baroin and Wolfgang Schäuble recall that neither the issue of how the tax is to be attributed nor the difficulties in implementing it, should not hinder agreement on the definition of such a tax.
France and Germany wish for a broad tax base as the tax would be withheld on "all financial transactions (transactions in financial instruments (securities and derivatives)) and foreign-exchange transactions". Intragroup financial transactions would fall within its field. The tax would also apply to currency operations. The rate would be weak in order to minimise the risk of relocations: 0.1 % for bonds and shares, 0.01 % for derivatives. Paris, Berlin and Brussels see two advantages in introducing such a tax: the sharing of the financial cost of the crisis with financial institutions and increased financial regulation.
According to forecasts made by the European Commission, the tax could raise 50 billion euros in funds, an argument likely to convince most States. In addition, it can radically weaken high-frequency trading, in the firing line of European governments in recent months due to its supposed role in creating market volatility. In the United Kingdom for example, around one-third of stock market transactions are carried out by computers that execute orders defined by complex algorithms.