Wednesday 23 May 2012 9:06 pm

MEPs demand transactions tax on European financial sector

THE EUROPEAN Parliament voted overwhelmingly in favour of an EU-wide financial transactions tax (FTT) yesterday, with leading proponents arguing “the FTT is an integral part of an exit from crisis.” The tax, of 0.1 per cent on equity trades and 0.01 per cent on derivatives, was supported by 487 MEPs and opposed by 152. Finnish MEP Sirpa Pietikainen said the tax represents a “fair contribution” from the financial sector for the damage caused in the financial crisis, and that it will stop damaging speculation in markets. She called for the tax to cover the whole EU, hitting out at opposition from countries like the UK which are “holding negotiations hostage,” and suggested the tax could initially cover a smaller group of more cooperative nations before later expanding. To cover the whole EU, the tax would need the unanimous agreement of all member states. Greek MEP Anni Podimata said “this is a strong signal of what the European Parliament can achieve despite different national views.” “This is what we can achieve when we put EU citizens’ interests above everything else.” Podimata rejected claims that trading activity will simply move out of the EU to avoid the tax, arguing “the cost of relocation is higher than paying the tax.”