The European Central Bank governor has taken the same position as Malta on the proposed introduction of an EU-wide financial transaction tax, saying it will not work unless introduced on a global level.
“To be practical, an FTT would have to be undertaken by all countries, otherwise you will have a displacement of industry towards countries that don’t have this tax,” Mario Draghi told members of the European Parliament’s Economic and Monetary Affairs Committee (Econ).
“We are at a time when most foreign investors and sources of funding have left the much greater part of the euro area – we want them to come back.
“One wonders whether the FTT is the best way to attract these foreign investors.”
The warning is similar to the one issued by Malta and several other member states including the UK, Sweden, the Netherlands, Luxembourg and Ireland.
But Econ, led by Socialist rapporteur Anna Podimata, this week voted in favour of the tax.
Malta’s Labour MEP Prof Edward Scicluna, who is also Econ’s vice chairman, voted against his group’s position and against the proposal.
Prof. Scicluna said a financial transaction tax would only be introduced if there was unanimous agreement between all member states and he questioned whether the government was expecting to change the minds of France and Germany.
These two heavyweights are at the forefront of the push to introduce the tax.
The EP is now expected to vote on the report by Ms Podimata during a plenary session in May.
The Commission estimates it could raise €57 billion for cash-strapped budgets by introducing a minimum tax rate of between 0.01 per cent (for derivatives) and 0.1 per cent (for shares and bonds).
– timesofmalta.com : 28 April, 2012