EUROZONE FINANCE MINISTERS have agreed to implement the so-called ‘Robin Hood Tax’, a small levy on financial transactions that is seen by many as a way of making the financial sector pay for the economic crisis.
European finance ministers yesterday gave approval to 11 nations to go-ahead with introducing the tax on financial transactions following an agreement under what is known as “enhanced co-operation”.
This is a measure rarely used that enables a minimum of nine EU nations to work together without the agreement of the entire 27-member bloc.
The tax was initially proposed by France and Germany and they have been joined by Austria, Belgium, Estonia, Greece, Italy, Portugal, Slovakia, Slovenia and Spain.
Ireland is not among these countries – the only one of the three bailed-out nations not to sign-up – with ministers here previously expressing concern that the introduction of the tax would harm employment prospects with jobs at the IFSC in Dublin seen to be particularly at risk.
Britain has also raised concerns that the tax would not make sense unless implemented on a global level.
Under the plans, a levy of 0.1 per cent would be placed on the value of any trade in shares or bonds, and 0.01 per cent levy would go on any financial derivative contract.
The 11 countries who have signed up to the measure will now require the European Commission to draft legislation enacting the measure which is also known as the Tobin tax after the economist who formulated it, Nobel laureate James Tobin.
“For the first time ever, the financial transaction tax will be applied at regional level,” said the EU’s tax commissioner Algirdas Semeta.
The tax aims to curb the market excesses that led to the 2008 global financial crisis but the notion failed to gain overall EU support with Britain vocal about concerns that it would harm investment prospects in the City of London.
Oxfam said that “the historic vote” of EU finance ministers sent “a clear message that Europe’s biggest economies are ready to make the financial sector pay to clear up the mess it helped to cause.”
- with reporting from AFP