Sunday 26 April 2020 5:08 pm

Angela Merkel seeks to impose financial transactions tax on EU countries

Germany will seek to impose a financial transactions tax, minimum tax rates and an EU-wide healthcare system on member nations during its upcoming six-month presidency of the bloc.

The revolving presidency of the Council of the European Union allows individual countries to set the EU’s agenda during the six months of their stint.

German chancellor Angela Merkel said today her country’s presidency, which begins in July, will be “clearly dominated by the issue of combating the pandemic and its consequences”.

She said this would include promoting a European health care system for all member states, a financial transaction tax, minimum tax rates and a joint carbon emissions trading scheme for planes and ships.

Several think tanks told City A.M. that the UK was fortunate to have avoided Germany’s policy agenda by leaving the EU in January.

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Head of business at the Centre for Policy Studies Nick King said it was “a relief for UK businesses that they won’t apply here”.

Adam Smith Institute head of research Matthew Lesh said: “We have rightly thrown our economy into the ICU to protect lives — the last thing we should do is strangle the patient before they have time to recover.

“These proposals would actively discourage everything we now need – a thriving economy in which companies employ and transact.

“A financial transaction tax that undermines the business activity we now need would be disastrous.”

Victoria Hewson, head of regulatory affairs at the Institute for Economic Affairs, said the proposals underline the importance for the UK to have “regulatory autonomy” from the EU.

“A financial transaction tax has been on the EU agenda for a while,” she said.

“Without the tax applying to transactions in the City of London it is unclear how much revenue such a tax would raise in the EU, especially if it encourages more business to move out of the EU, which would clearly be seriously counterproductive to any post-coronavirus recovery.”