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Austria’s new finance minister dismissed a proposal by his German counterpart on how to tax financial trades in the European Union, throwing the years-long effort into disarray.
“We want a common, broad financial transaction tax. We’re ready to talk, but the current proposal is the opposite of what was originally intended,” Austria’s Gernot Bluemel told journalists on his way into a meeting of EU finance ministers in Brussels. Without a new a approach, the country will leave the group of 10 still working on the plan, he said.
Germany’s Olaf Scholz tabled a “final proposal” for the levy in December that focused on stock purchases, after talks on a broader version of the tax had failed. Bluemel, who was sworn in along with the rest of Austria’s new government this month, said this approach would damage the real economy while letting “speculators” off the hook.
The European Commission first proposed a financial-transaction tax in 2011 to make sure the industry made a “fair contribution” after taxpayers bore most of the costs of the financial crisis. When some member states opposed the plan, a smaller group sought a compromise under “enhanced cooperation” rules. Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain are still at the table.
Scholz said he still expects an agreement with other European countries on the issue, indicating that some countries are willing to join the group. After years of discussion, “everybody who’s been involved knows what’s possible and what isn’t,” he said.
Under EU rules on enhanced cooperation, at least 9 countries are needed for a coordinated approach. Scholz’s proposal foresees a tax rate of 0.2%, which would apply to acquisitions of shares issued by companies based in one of the participating countries and whose market capitalization exceeds 1 billion euros ($1.1 billion).
(Updates with comment from Scholz in fifth paragraph.)
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