A financial transactions tax proposed by the European Commission and opposed by Malta is politically just, according to the man responsible for the EU’s internal market.
The Commission was proposing “a rather small tax” to claw back some of the support the financial sector got from governments when markets collapsed in 2008, said Internal Market and Services Commissioner Michel Barnier, in Malta for a one-day visit.
Asked for his reaction to Malta’s stand, Mr Barnier said the Commission was engaged in discussions “as normal” with the Maltese government.
Finance Minister Tonio Fenech, standing next to Mr Barnier for the joint press conference, said nothing.
Malta has argued that the tax would put the island’s financial services sector at a disadvantage unless it was introduced across the globe. The UK has adopted a similar stand. Mr Barnier defended the tax insisting it was “technically easy to implement, economically bearable, financially productive and politically just”.
He said the Commission could only propose legislation and the final decision had to be taken by the Council of Ministers and the European Parliament. Alternattiva Demokratika, the green party, has called on the government to support the financial transactions tax, which it described as a gesture of solidarity.AD chairman Michael Briguglio said the proposed tax would help generate revenue that could be used to strengthen the European economy.
“If workers and employers are paying tax to help sustain economic and social stability, it is only fair that banks and financial institutions do the same,” Mr Briguglio said.
Mr Barnier 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.
Mr Barnier shunned fears expressed by international commentators and analysts that the eurozone might disintegrate as a result of the sovereign debt crisis.
“I do not share this catastrophic and fatalistic view of the problems,” he said, adding the euro was not at stake because it was a solid currency.
The problem was sovereign debt that some countries had and which triggered consequences for others, he added.
Each country must work at home to manage its budget properly and reduce debt, then work to help other countries.
Drawing on the famous quote from the rallying call of the French novel the Three Musketeers, Mr Barnier said every country had to adopt the principle: “One for all and all for one.”
He insisted it was a question of determination to implement what heads of government agreed upon in October when they decided to boost the firepower of the bailout fund, give it new powers and strengthen fiscal governance across the EU.
Mr Barnier paid a courtesy visit to Prime Minister Lawrence Gonzi at Castille.
ksansone@timesofmalta.com