The European Parliament yesterday endorsed a proposal for the introduction of an EU-wide financial transaction tax (FTT), despite opposition by many member states, including Malta.
It is now in the hands of Europe’s Finance Ministers
Though the vote will not secure the law’s introduction, MEPs said they wanted to send a clear message to opposing member states that the European Parliament was four-square behind the Commission’s efforts to introduce the tax.
The rapporteur on the issue, Socialist MEP Anni Podimita, warned that “the EU cannot be held hostage by a handful of member states”.
Malta and the UK are among those arguing that introducing the tax on an EU-wide basis goes against the EU’s and their national interest.
Despite securing 487 votes in favour, with the support of a majority of MEPs from the biggest two political groups in the chamber, the EPP and the Socialists, all Maltese MEPs present during yesterday’s session voted against the proposal and in favour of Malta’s stand.
Labour’s John Attard Montalto was the only absence among the six Maltese MEPs.
Only Nationalist MEP David Casa, one of Malta’s two MEPs sitting on the Economic and Monetary Affairs Committee, the main driver of this initiative, took part in the debate.
Mr Casa, a banker by profession, argued that if introduced only on an EU basis, the proposal would drive financial services away from the EU to other jurisdictions.
“It is dangerous for Europe to think that setting high regulatory standards in the EU simply means other jurisdictions will do the same.
“The extremely high mobility of financial transactions makes the possibility that banks would move a number of their transactions to financial markets that do not apply the tax, real and to an extent, inevitable.”
Mr Casa said he agreed that banks and other institutions should foot their fair share of the costs of the economic crisis, but an FTT was not the best way to achieve this objective.
On the other hand, European Taxation Commissioner Algirdas Semeta welcomed the EP’s opinion with open arms.
“It is now in the hands of Europe’s Finance Ministers to reach a quick decision on the Commission’s proposal for a financial transactions tax. This is what citizens – and now the European Parliament – expect.”
According to a recent Eurobarometer survey, 66 per cent of EU citizens are in avour of an FTT.
The proposal, launched by the Commission last year, suggests the introduction of a 0.1 per cent tax on shares and bonds and 0.01 per cent for derivatives in all EU member states as from 2014.
The proposal needs unanimity among the 27 member states to be approved. Malta and a number of other member states have already declared that they will vote against the proposal.