Commissioner tries to persuade Malta on financial transactions tax
The European Commission's proposal for a financial transactions tax was "technically easy to implement, economically bearable, financially productive and politically just," Commissioner Michel Barnier said this morning.
Malta is opposing the tax because it will put the country's financial services at a competitive disadvantage.
Addressing a news conference with Finance Minister Tonio Fenech this morning, the commissioner for internal market and services described the tax as "rather small".
Mr Barnier said the tax was a new idea but over the past few years a lot was done by the EU to protect the financial services sector and it was only natural that the sector gave something back.
"The commission can only propose, now we will see how it progresses in the Council of Ministers and the European Parliament where decisions will eventually be taken."
He said the Commission was in talks with the Maltese government about the issue.
Mr Barnier, in Malta on a one-day visit, and Mr Fenech discussed matters relating to the internal market, the transposition of EU directives and the Commission's initiatives to make life easier for businessmen and consumers across the EU.
Asked about fears that the eurozone may disintegrate as a result of the sovereign debt crisis, Mr Barnier shunned what he described as "a catastrophic and fatalistic view of the problems".
He said the euro was a solid currency and not at stake.
The problem was with sovereign debt that some countries had, he added saying this triggered consequences for other countries.
Mr Barnier said it was a question of determination to implement what heads of government agreed upon in October.
Each country must work at home to manage its budget properly and reduce sovereign debt.
Drawing on the famous quote from the rallying call of the three musketeers, Mr Barnier said every country had to adopt the principle: "One for all and all for one."
Mr Fenech said Europe would be strong despite the current crisis.
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Tony Borg
Dec 1st 2011, 21:13
Why don't you go and sell discarded potatoes instead of teaching us how to implement new TAXES. Are you aiming for a Medal for your lapel, Mr Barnier??
We do not need lessons of how to implement but to know the after affects of these useless Taxes. Is this the solution to Greece, Portugal, Spain or Ireland ?? or shall i say Belgium ?!! It must have slipped between the papers no.............
Mario Grima
Dec 1st 2011, 20:12
The masters have spoken and the slaves have to obey, whether we like it or not. Who are you trying to kid Mr. Barnier?
Mr Chris Mintoff
Dec 1st 2011, 16:20
Who are these people? And who gave them power?
M Sciberras
Dec 1st 2011, 14:59
Malta needs to oppose this tax vigorously until and unless it is imposed globally which (a) is never going to happen and (b) even if should happen, it will be impossible to ensure that it is equally enforced in every country. EU states will find themselves at a disadvantage. For the record - 80% of this tax would be collected in London with much of the remainder in countries where the financial sector is important i.e. Malta, not in Barnier's bloated, self-important and strutting nanny state of a home country. Go home Mr Barnier.
Tom Davis
Dec 1st 2011, 14:53
First of all, the financial trasactions tax (FTT) will devastate Malta's financial services sector. One third of the entire industry will move to London, Geneva, Hong Kong, New York, etc. It will cause huge unemploment in Malta.
Secondly, the FTT isn't a tax on banks or financial institutions, it's a tax on retail investors and retirement plans.
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http://www.ft.com/intl/cms/s/0/0df299ba-15ef-11e1-b4b1-00144feabdc0.html#axzz1fHzgx4TV
"Just to give an indication, a 30-year-old worker, retiring at the age of 65, having a pension fund yielding 5 per cent per annum, with a turnover of the portfolio of 1.5 times a year, will see his pension reduced by 5 per cent due to the Tobin tax."
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http://www.risk.net/life-and-pension-risk/news/2127518/eu-financial-transaction-tax-proposals-hit-pensions-hard-experts
Pension funds could soon have to bear the cost of a Europe-wide tax on equity, bonds, currency and derivative transactions.
“In fact, one of the conclusions by the International Monetary Fund in its report, A Fair and Substantial Contribution by the Financial Sector, was that the ‘real burden may fall largely on final consumers rather than, as often seems to be supposed, earnings in the financial sector.’ It further adds that a tax levied on transactions at one stage ‘cascades’ into prices at all further stages of production.”
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http://www.efinancialnews.com/story/2011-11-14/dutch-fund-warns-ftt-would-cost-billions
Dutch fund warns FTT would cost ‘billions’
“Guus Warringa, chief legal counsel and board member of APG Asset Management, said: “The rough calculations point to a multi-billion euro damage just for Dutch pension funds… The man on the street will pick up the cheque.”
Charles Sammut
Dec 1st 2011, 14:49
". . . . . . a financial transactions tax was "technically easy to implement, economically bearable, financially productive and politically just," Commissioner Michel Barnier said this morning."
Now what did they say about the Euro? Manna from heaven? This guy should be a second hand car salesman. "Yes sir, one elderly lady owner, only 5000 kms in 8 years, always garaged and serviced and it does 85 miles per gallon. No children or dogs. An absolute bargain. How can you not buy it?"
These unelected Eurobrats are only interested in staying on board the gravy train and will say anything to keep it chugging along.
Patrick Zammit
Dec 1st 2011, 14:27
Can this guy first and foremost tell us his democratic credentials, namely how many votes he got during the last election?
Rocco Camilleri
Dec 1st 2011, 14:18
Sur Barnier hallina bi kwietna jekk jogghbok. U int tahseb li dak li ser taghmlu mhux biex ikun ta' benefficcju l-aktar ghalikom milli ghalina !!!!!!!! . Din jonqos iddahhlulna biex igiebuna aktar sew milli qedien !!!!! U mela jigi jghidilna li ma' tantx tghamlilna differenza, mela ma' jafx li ghalina kull qatra todd. Keep it for yourself Mr.Barnier and let us fend for our selfs, it's better check the other large countries for their huge debts which you should have checked before they were accepted in the euro. No good homework done.
Josef Laspina
Dec 1st 2011, 13:59
http://www.washingtonpost.com/business/economy/european-debt-crisis-euro-zone-facing-make-up-or-break-up-choice/2011/11/30/gIQAuriAEO_story.html
"What’s being debated is nothing short of a reordering of the European political and financial system. Governments would transfer some of their sovereign power over spending and taxes to a central authority, responsibility for individual government debt would be collectivized across the 17 euro nations, and — potentially — the European Central Bank would take a more aggressive role in shoring up the regional economy."
These policies might not be viewed as 'good' for EU States who once thought of themselves as being Independent Countries, Malta included (having independent financial systems and foreign policies). This is the evident work of Globalists, however the US and the EU might be better off this way when considering competition with Russia and China.
Anthony Azzopardi
Dec 1st 2011, 13:49
"It was only natural that the sector gave something back." He said. But he did not say that it is not the sector which gives something back but the people who try to save and invest to make up for their miserly pensions for example. I hope the Maltese Government holds firm. This is a European tax added to our many taxes. Shame!
maria aquilina
Dec 1st 2011, 13:27
In the long term we will have to say yes and agree. Let us wait and see. This is the price we have to pay to the fact that we are members of the European Union.
Rod Enderby
Dec 1st 2011, 13:22
Most national governments are having to make savings but the EU wants more and more money.
j brincat
Dec 1st 2011, 13:04
Hope the present government holds firm on this stand as it is in Malta's interest not to agree to the proposed tax harmonization across the EU. This so as to safeguard our financial service industry which in recent years was the main factor contributing to our economic growth and which employs thousands.
(jb)
Charles Cremona
Dec 1st 2011, 13:01
The problem with the Euro is the difference in competitivness between north and south. How do you adjust a difference of 40% in production costs between Germany and Italy without strangling the uncompetitive country, some say by cutting wages and services, that will send the economyand into a recession spiral. In the old days when these countries had their own currencies they would lower their exchange rate to remain competitive but they cannot do this anymore because of the Euro, hence, ruin or leave the Euro which will bring on a Euro collapse. Let me remind Mr Barnier more taxes are making Europe more uncompetitive and very soon even his country France which is now implimenting massive budget cuts could be in trouble simply because it has become too expensive and cannot compete with Germany and if we are not carefull it could be our turn soon.
Colin Camilleri
Dec 1st 2011, 12:49
Since Malta relies heavily on Financial Services and therefore Financial transactions, it could be hit too hard with the introduction of this tax! Malta Financial Services may become unattractive due to this stealth tax, lose competitiveness and long term investors may walk away and look for greener pastures! What about the impact on the Maltese economy? The Brits are not afraid for nothing! The Swedes introduced such a tax locally in 1984 with a huge detrimental impact on the economy, only to scrap it 7 years later. But if such a tax gets imposed on us from Federal Germany and France, how are we going to weather its impact on maltese economy? Does Tonio Fenech has a strategy if he caves in to this pressure? We need to KNOW! Because many jobs could be lost!
George Calleja
Dec 1st 2011, 12:20
I agree with the Malta government's stance against this tax. Europe should stop penalising countries for great debts incurred by irresponsable governments in some countries. Malta has kept its books in order and now it is being asked to comply with the EU's recommendations in order to help governments that immersed their countries in great debts!
Gordon Farrugia
Dec 1st 2011, 13:06
george we are also immersed in great DEBTS
EUR4,500,000,000 of visible debt - that doesn't include debt owed from para statal institutions.
the difference is this money is mostly owed to Maltese tax payers so he can tax them to death which is what he's doing underhand with the savage price hikes in electricity/water/gas/fuel.
Michael Borg
Dec 1st 2011, 12:19
Econmically bearable ??? ok reduce your pay by 50 % mr commissioner that is Econmically bearable , not my wage
Mark Fleri
Dec 1st 2011, 12:01
'He said the euro was a solid currency and not at stake.' Solid currency my left foot, this is guy is something else and whats worse he is the EU Commissioner, more like a joker.
Carmel Zammit
Dec 1st 2011, 11:55
Hands off our financial services. This sector of our economy is providing a living to a considerable amount of people and should be protected. The British has called this a tax on Britain. Actually it is a tax on us as well. The EU seems to be bothered only when matters are adverse to German interests. As long as the latter's interests are not touched anything goes. Real European solidarity indeed. The EU would perhaps do well to look for other sources for raising revenue.
Charles Cremona
Dec 1st 2011, 13:08
The British are not in the Eurozone, they already said that they will not implement this tax. The city of london is the Worlds biggest financial centre which generates billions to the british economy and if they aplied this tax a lot of the banks operatink from there will simply move to the US and Hong Kong. The same will happen to the financial services industry in Malta if this tax is applied here, the proplem is Malta is in the Eurozone andwill have to do what the others in the Eurozone decide.
David gatt
Dec 1st 2011, 11:54
http://ec.europa.eu/commission_2010-2014/semeta/headlines/news/2011/09/201109282_en.htm - I hope this article answers any questions
Tom Davis
Dec 1st 2011, 15:11
The article you point to is incorrect on many points and fails to recognize that the EU's own "Impact Assessment Report" projected decreased EU GDP and 500,000 EU unemployed because of this tax.
At the last ECOFIN meeting 11 EU countries spoke against the financial transactions tax. Those who spoke against the FTT raised issues that the EU doesn't want to talk about: (a) The FTT isn't a tax on banks, it's a tax on regular savers and pension plans; (b) it increases costs of capital thereby by imposing a "secondary tax" on consumers; (c) the FTT is a "net negative tax"(the costs of lost income and business taxes is greater than the FTT collected).
The Czech Finance Minister said the FTT is "economically irrational."
The Swedish Finance Minister (who has a PhD in Economics and has studied the FTT for years) called the FTT "a non-starter."
The Dutch Finance Minister said it would be difficult to support the tax because so much of the burden falls on pensioners.
In fact, one of the conclusions by the International Monetary Fund in its report, 'A Fair and Substantial Contribution by the Financial Sector', was that the "real burden may fall largely on final consumers rather than, as often seems to be supposed, earnings in the financial sector." It further adds that a tax levied on transactions at one stage ‘cascades’ into prices at all further stages of production.
A majority of G20 nations have rejected the FTT as destructive economic policy.
Lael Brainard, PhD, a liberal Harvard-trained economist and US Treasury Department Undersecretary for International Affairs, is pushing hard for a tax on banks. She really wants to hold banks accountable. But she's against the FTT because it's not a tax on banks or financial institutions. It's a tax on ordinary investors. After the most recent G20 meeting she said, “We're very much in sync with Europe on their goal of ensuring that large financial institutions bear their fair share of the burden, but the US-proposed 'responsibility fee' would better deter the kind of risky behavior that led to the crisis as well as ensure that large financial institutions and not retail investors bear the burden."
John Xuereb
Dec 1st 2011, 11:28
Econmically bearable on whom exactly ?
Politcally just....why ? - To help pay for your inflated wages and perks no doubt as you waffle away in your ivory tower.
Also, i think it is in the interest of the EU to protect the financial services sector which is why they protect it in the first place.
Peter Murray
Dec 1st 2011, 11:22
This tax,if ever implemented, will simply be onpassed onto the banks customers in one insidious form or another.
Dominic Chircop
Dec 1st 2011, 15:25
If only one, repeat one, E U member state refuses to agree to this transactions tax, the E U cannot impose it on all Member States. Like the CCCTB, which Malta is also raising queries on, the proposed new tax need not be introduced in Malta. That is why Commissioner Barnier came begging, cap in hand.
But still, with the EU/TFEU treaty, a procedure called "enhanced co-operation effectively allows, as a measure of last resort where unanimity cannot be achieved, a smaller group of at least nine Member States can implement such policy.
This mechanism obviates a possible stalemate to the decision making process where a minority of States oppose a proposal.
So, all bloggers who think only in local terms are somewhat blinkered. When their PM signed the TFEU treaty, Malta provided this let-out from unanimity.
George Azzopardi
Dec 1st 2011, 11:21
Can anyone explain in simple terms what this means for us normal tax payers. thanks.
FB Aquilina
Dec 1st 2011, 12:04
@ Mr Azzopardi
The simplest explanation is more taxes on us. Thank you very much indeed Mr Commissioner.
Gordon Farrugia
Dec 1st 2011, 12:22
they want to tax all your financial transactions - basically when you send funds abroad, or make foreign currency exchanges or make some pension fund application or you buy stocks or bonds you will incur a transaction tax for the privilege. It would particularly greatly hit the financial brokerage companies based in Malta and we should say no!!!!!!!!!!!!!
Please choose the reason of your report below: