Germany, France pitch Tobin tax on financial transactions
Germany's Finance Ministry says Berlin and Paris have jointly appealed to the European Union's executive to prepare the introduction of a tax on financial transactions.
Germany's Finance Minister Wolfgang Schaeuble and France's Pierre Moscovici are urging EU nations to agree to "enhanced cooperation" on the proposal and urged their European counterparts to appeal to the European Commission to implement the idea.
Named after Nobel Prize winning economist James Tobin, Tobin taxes are aimed at removing speculation from markets by imposing a microscopic tax whenever money is transferred between two parties.
The specifics of the current plan call for a tax of 0.1 per cent tax on stock and bond trades, and 0.01 per cent on other transactions such as currency conversions. The move would act as a curb on short-term speculators and give European regulators a way of raising billions and building an emergency fund to help fix any future financial disasters.
It's an idea that has come up in the past and has been repeatedly rejected by politicians, most recently last year when Britain killed a similar proposal because of displeasure with what the tax would do to The City's financial industry.
The plan is unlikely to secure a majority within the 27-nation EU. But Germany and France are pressing for its introduction by the legal detour of so-called enhanced co-operation, which would let it pass if one third (in this case nine) countries are on board.
At a June meeting of finance ministers 10 nations, among them Italy and Spain, backed the proposal. Britain, which has the continent's biggest financial industry, opposes the plan.