Financial transaction tax unlikely before 2017-Austria finmin 

Austrian Finance minister

Europe is unlikely to impose a financial transaction tax before 2017, not in 2016 as earlier planned, Austrian Finance Minister Hans Joerg Schelling told Reuters.

The tax, first proposed in the 1970s to penalise currency speculators, was seized on by France and Germany in 2012 as a way to correct the excesses that led to the worst financial crisis in a generation.

But talks became mired in disputes over how to levy the tax and whether to include derivatives. Britain, the biggest financial market in Europe, opposed the idea, along with Luxembourg, another financial centre.

Various countries tried to win exemptions to shield their financial institutions, raising doubts on whether the tax would ever come to pass. Eleven countries ended up engaged in talks over the tax, with Austria leading the initiative.

France had said this year that the tax could be applied in January 2016.

“As I don’t think that a decision will be made before June, I don’t see that date as doable,” Schelling said in an interview on Thursday, pointing to complex legal and technical preparations needed to introduce the levy.

“It will probably not be possible to implement it before 2017.”

Discussions among euro group finance ministers on the topic continue in Luxembourg on Monday. Schelling said he hoped for an initial vote on what level of support exists for two different models of the tax.

There are differences over whether the levy would cover all shares and derivatives and whether it would be based on where the trader buys a financial product or where it originates. Another option is to halve the rates, Schelling said.

So far it was not clear where the majority – if any – would lie, Schelling said. A tax would not make much sense should big countries like Germany or France not take part, he said.

He did not rule out that the tax might not materialise at all. “One can also decide that we don’t want this. Then everyone should say it, it’s not an issue. But then I would like to not continue my work (on it) any longer.”

German Finance Minister Wolfgang Schaeuble was “not very optimistic” about significant progress on Monday, calling talks on the tax “very strenuous”, Berlin’s Finance Ministry said in an email, adding that the tax would not fail because of Germany.

Source: Reuters – Financial transaction tax unlikely before 2017-Austria finmin

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