Patrick Nulty
Question:94. Deputy Patrick Nulty asked the Minister for Finance the position regarding the establishment of a financial transaction tax within the Eurozone; and if he will make a statement on the matter. [34337/12]
View answerWednesday, 3 October 2012
Questions (94)
Written answers
It became clear at the ECOFIN meeting in June that the European Commission’s proposal for an EU-wide Financial Transactions Tax (FTT) would not be agreed, and those countries who favour the tax will now try to introduce it by way of "enhanced co-operation", under which at least nine countries must participate. This requires those countries to write to the Commission asking it to produce a formal proposal for such a directive. This mechanism would require at least nine Member States to participate and would require agreement by Qualified Majority Voting (QMV) comprising 72% of the overall votes and states representing 65% of the total EU population. As of 2 October, three countries – Austria, France and Germany - have written to the European Commission, requesting it to submit to the Council a proposal for a Decision authorising the creation of an FTT via enhanced cooperation. There is no revised proposal as of yet.
Ireland will not be among the participating countries but we will not stand in the way of those who want to introduce an FTT under the "enhanced co-operation" mechanism.
I have previously stated clearly Ireland’s position that an FTT would be best applied on a wide international basis to include the major financial centres. If it cannot be introduced on a global basis, it would be better if it were introduced on at least an EU-wide basis, rather than only in the eurozone, to prevent any distortion of activity within the Union. This is in line with the Commission’s desire that the tax should be applied on a global basis. Such an approach would avoid the danger of activities gravitating to jurisdictions where taxes are not levied on financial transactions.
Clearly a major concern would have been that the introduction of an FTT in Ireland but not in the UK could have led to certain business moving to London, with consequences for employment and activity levels in our financial services industry, particularly in the IFSC. We were also concerned that it might affect transactions in Government bonds, particularly on the secondary or "repo" market.
I have also previously indicated Ireland’s principled opposition to dealing with tax measures under "enhanced co-operation".
Our non-participation in the new initiative is therefore consistent with the position we have taken to date on the Commission’s FTT proposal. We will continue to monitor discussions on the FTT to ensure the compatibility of any proposed measure with the internal market and with existing taxes on financial transactions, including our Stamp Duty.