Italy is urging European Union ambassadors to inject life back into stalled plans for the proposed financial transaction tax (FTT) as a December deadline looms, with the ambassadors being asked to resolve key disagreements and ask their staff to find a compromise by the end of the year.
The FTT has already been agreed by 11 of the EU’s member states and if the plans were to stall now, it would be a major embarrassment for Germany and France, which have been the leading campaigners for the introduction of the tax, which has been designed to make banks pay for the taxpayer aid they received in the financial crisis.
The UK and the remaining EU states have refused to take part in the process, saying that such a tax would be harmful to financial markets and the UK Government even resorted to the law, saying that the tax was ‘discriminatory’ to the member states not signing up.
Now it would appear that moving from principle to blueprint by the December 31 deadline set by the plan’s supporters is proving difficult for the EU’s presidency, Italy, which is now seeking political intervention to get things moving.
In fact, a document prepared for a meeting of the EU ambassadors later this week said that, while measurable progress has been made towards a convergence of views of the member states on the scope of the FTT, the scope of derivatives as well as the taxation principle remain a key issue which block the presidency from presenting a compromise text that would lead to an agreement.
The document also indicates that Italy has asked the European Central Bank to show how taxing certain derivatives could affect monetary policy and financial markets across the EU.