France and Germany led a group of countries on Tuesday in pushing for a tax on financial trading although the levy is set to fall far short of what was pledged at the height of the financial crisis and may be pared back further.
Promised in 2011 by German Chancellor Angela Merkel and the then French president, Nicolas Sarkozy, as a means of getting banks to pay for a financial crisis that had then bankrupted Greece and Ireland, the tax was contested from the outset.
Finance ministers from a group of 11 euro zone countries that back the tax made a further pledge on Tuesday to introduce it by January 2016 at the latest. Crucial questions such as how high the tax should be and how it will be charged remain open.
“I believe we will reach a political agreement on a financial transactions tax, all ministers are ready,” Luis de Guindos, Spain’s economy minister, told reporters ahead of a gathering of EU ministers. “I hope we will reach agreement on the assets to be included, mainly shares and some derivatives,” he said, sharing a view supported in particular by Italy.
“We want the rules agreement this year so it can come into force next year,” he said. “We still need to decide the level of the tax and how it will be levied.”
Resurrecting an idea first conceived by U.S. economist James Tobin more than 40 years ago is symbolically important in showing that politicians, many of whom have been accused of fumbled their way through the crisis, were tackling the banks blamed for causing it.
As ministers met in Brussels, activists in favor of a ‘Robin Hood tax’ – after the British “outlaw” who was said to rob the rich to give to the poor – acted out a boxing match to symbolize the fight over the levy.