LONDON (MCT) — Pressing ahead where others have balked, 11 European countries received the green light Tuesday to plan a financial transaction tax that could generate billions of dollars in revenue for cash-strapped governments.
Led by Germany and France, the European Union's two heavyweights, the nations will now work out how to introduce a levy on the buying and selling of stocks and bonds and on the use of complex financial instruments known as derivatives.
Advocates say such a tax is not only necessary to help discourage risky transactions like those that precipitated the 2008 global financial meltdown but also a fair way to make financial institutions pay to help clean up the leftover mess.
The move is a controversial one. The U.S., at the urging of Wall Street, has opposed a financial transaction tax; so has Britain, which is home to Europe's largest financial trading hub.
Hesitation in London as well as some other European capitals stalled a proposal, made in September 2011, to charge a unified financial transaction tax across the 27-nation EU. The 11 countries, all of which share the euro as their currency, forged ahead on their own, deepening integration among a subset of EU members that together account for more than half of the region's economic output.
It is only the third time that the EU has invoked a treaty provision allowing a limited number of members to act in concert without the rest of the bloc — although the other members' approval to do so is needed — and the first time that such a move has focused on tax policies. Algirdas Semeta, the EU's tax commissioner, told reporters at a meeting of finance ministers Tuesday that the decision represented a "major milestone."