Ireland to push for a deal on financial transaction tax

Finance ministers could vote on tax next week.

The first meeting of the year of European Union finance ministers, which will be chaired by Ireland’s Michael Noonan, could be boosted by an agreement to establish a financial-transaction tax.

Officials from Ireland, which took over the rotating presidency of the EU’s Council of Ministers on 1 January, hope to hold a vote at the meeting on Tuesday (22 January).

The failure last year to agree on introducing a financial-transaction tax in all 27 EU member states has obliged the European Commission to resort to enhanced co-operation to propose the legislation, which required the backing of a minimum of nine countries.

The tax would be introduced only in those countries that signed up. But a qualified majority of all 27 countries needs to support the proposal – and this is the subject of the proposed vote by finance ministers. The Commission would then formally publish its legislative proposal – although this is unlikely to differ from the draft put forward in 2011 when it wanted all 27 member states to sign up.

National finance ministry officials have this week been discussing whether to hold the vote on Tuesday. A decision will be taken when ambassadors from the member states meet tomorrow (18 January).

One barrier could be that Wolfgang Schäuble, Germany’s finance minister, who has been one of the leading proponents of a financial transaction tax, may not be able to attend on Tuesday.

If the vote is delayed it is expected to take place when finance ministers meet on 12 February.

So far 11 countries – Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain – have said that they want to implement a common financial- transaction tax. They could be joined by the Netherlands, whose finance minister, Jeroen Dijsselbloem, hinted in November that he was in favour of a tax under certain conditions.

At the meeting, finance ministers are also expected to receive updates on negotiations on the ‘two-pack’ of economic governance legislation, which remains the subject of disagreement despite 13 rounds of talks between the Council, Commision and European Parliament.

The Parliament wants commitments to part-mutualise national government debt and to introduce short-term euro-bills. Most member states, most forcibly Germany, reject the idea. José Manuel Barroso, the president of the European Commission, said on Tuesday (15 January) that agreement on the two-pack was “essential” to “signal that Europe is capable of decisive action” on economic governance.

Finance ministers will also discuss the latest developments in discussions between the Parliament and the Council on the capital requirements directive and regulation (CRD IV) and the single banking supervisor, as well as the annual growth survey and the Commission’s plans to tackle tax evasion.

Finance ministers from the 17 eurozone member states are on Monday (21 January) expected to discuss Cyprus’s request for a bail-out, but will not come to any decision. They will also talk about the latest economic situation in Greece, although they are unlikely to decide on the disbursement of its next bail-out loan this month.

It is likely that Dijsselbloem will be named as the Eurogroup’s new president, succeeding Jean-Claude Juncker, the prime minister of Luxembourg.

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