Excellent news! Here's the full article for those who can't easily access through the link: Cracks appear in early FTT talks Michelle Price and Richard Partington 25 Mar 2013 Tensions are building among the 11 European Union member states signed up to introduce a sweeping new tax on financial transactions, with many public affairs experts already predicting a dramatic watering down of the proposal. Dividing lines have emerged over the scope of the proposal, possible exemptions and the implementation timeline. There is also profound confusion as to how the tax will be enforced and collected, according to several lobbyists familiar with the negotiations. James Hughes, an account manager at Brussels-based financial public affairs consultancy Cicero, said: âThe member states are divided, there is no unity about what the FTT will cover.â The FTT, unveiled by the European Commission last month, is due to be introduced under the EUâs enhanced co-operation mechanism, which allows a minimum of nine member states to work together to introduce new rules. The duty covers all financial institutions, all financial markets and all financial instruments, levying a rate of 0.1% on equity and bond trades, and 0.01% on derivatives. The tax is partly intended to prevent emerging divergence among EU member states following moves by France and Italy to introduce national FTTs in August 2012 and March, respectively. However, these pre-existing regimes are hampering negotiations, with France pushing for a more limited tax in line with its own, according to public affairs experts. One Brussels-based lobbyist representing end-investors said: âFrance has implemented an FTT already, and when a major state comes to the negotiating table at an EU level on an issue where they have already passed a law at a national level, by definition their national law is their position. âFrance is going to ask for exemptions on bonds, derivatives and marketmakers, and, within equities, for any stock which has a market cap of below â¬1bn.â According to unofficial briefing notes from a February meeting of member states, seen by Financial News, several participating countries are pushing for pension funds to be excluded from the scope of the tax, while Belgium, Slovenia and Slovakia are pushing for exemptions for repurchase agreements. The Irish Presidency of the Council of the European Union, which is formally leading the negotiations on the tax, is understood to be preparing a so-called non-paper â a non-official document designed to provide the framework for a discussion â which is expected to outline a new tax proposal more limited in scope with possible exemptions. Hughes said: âFrance wants it to be much narrower. I wouldnât be at all surprised if the non-paper starts with a much narrower scope.â At the February meeting, Germany, a key member of the co-operation, called for a phased-in approach that would encompass equities and bonds, later expanding to derivatives. However, one Brussels-based lobbyist at a US firm said Germanyâs commitment to the tax was in doubt. He said: âGermany is freezing everything politically. In Germany, the Conservatives donât talk about the FTT anymore. If [Angela] Merkel cannot get a majority at the next election and she forms a coalition with the liberals, the country will pull out. If Germany pulls out, it will probably drag Austria with it. At that point, with just nine countries, it would probably regress to national taxes.â The collection of the tax is also a source of considerable confusion. In a letter sent to member states earlier this month, seen by Financial News and dated March 11, the Irish Presidency asked the Commission to provide examples specifying the âparty responsible for payment of the duty, the party responsible for collection of the duty, the taxing authority to whom the payment would be madeâ. Concerns are also growing as to the impact of the tax on key G20 dossiers produced by the Internal Market and Services unit of the Commission. The Presidency has asked the Commission to provide feedback on âthe consistency of the FTT proposalsâ with the Markets in Financial Instruments Directive and the European Market Infrastructure Regulation. Paul Crean, tax director at accountancy firm BDO, said: âIf they canât get it through with this limited number, then I think some countries will probably go their own way.â The Irish Presidency did not reply to a request for comment in time for publication.
wow impressive... if that's all true, this would be very very good news. germany has until recently been vocal about this though, merkel even mentioning it in her monthly talk a few weeks ago; personally i don't quite see them doing a 180 without losing their face (and i thought the liberals in germany were pretty much destroyed anyway, so were unlikely to give merkel any sort of a majority? have i missed something there? anyone with any insight into the german elections, freel free to comment). but let's be clear about this, germany pulling out, and worldwide ftt is completely dead, all momentum in favour of any ftt gone.
And France defending their own model is great too...The two most important countries don't want the commission's FTT. It's true that we mustn't buy everything coming from financial medias but it sounds so logical...Perhaps Merkel understood that it wasn't that bright to kill Eurex and every german banks desk worldwide...
Trading Clamps Spur Lobby Effort: http://online.wsj.com/article/SB100...5826.html#project=HFT0325&articleTabs=article -Guru
British MPs urge legal challenge over transaction tax http://uk.reuters.com/article/2013/03/27/uk-britain-eu-tax-idUKBRE92Q0M220130327
Nice, but unfortunately it's coming from the Lords. Perhaps my views are a little jaundiced, but the upper house tends to be viewed as an appendix - you don't know it's there unless you get appendicitis, in which case it's a bloody nuisance.
If Germany turns more towards liberals, won't that political change spur FTT, as socialists want FTT, as happened in France? If EC-11 FTT is watered down to France's FTT, isn't that still bad for traders who won't win exemption as market makers? If more exemptions are added like for pension funds, it's still bad for traders. What's the difference if you have to pay Brussels for EC-FTT or 9 or 11 different national tax authorities? A break in the grand design shows flaws and that's good news. Infighting might also be good to slow it down and let it fall apart. Meanwhile, France, Hungary and Italy can experience more disappointment in FTT results and maybe change their tune. Why threaten your countries financial services and downsize the industry to fork over taxes to Brussels, where they go down the administration hole?
As we've just seen in Cyprus, the Bully-Boys from Brussels will have their way no matter what they have to do.
I don't know what the liberals in the USA are all about, but in Germany liberals are no left-wingers, quite the opposite. They traditionally promote free markets, light-touch regulation, economy-friendly policies and low taxation. Hence they do not support a FTT. Just because they do also support more civil rights and gay marriage and all that doesn't make them socialists.