Wednesday, October 10 07:58:41
European Finance ministers have cleared the way for the first EU tax to be introduced in a limited number of member states. The Government is shunning the plan by 11 other euro zone countries to introduce a common tax on financial transactions because it fears the loss of lucrative jobs to Britain, which is also opting out. In Luxembourg, after two days of talks with his European counterparts, Minister for Finance Noonan said 33,000 people worked in the financial sector in Ireland.
"If we were to accept a financial transaction tax and London didn't there would be transfer of business from Dublin to London and a lot of jobs could potentially be lost," he told reporters. The transaction tax initiative is being led by Germany and France. In the last fortnight, they rallied the backing of Austria, Belgium, Slovenia, Greece and Portugal. Italy, Spain, Estonia and Slovakia joined up yesterday, triggering measures in the Lisbon Treaty which allow a coalition of countries to sidestep the usual requirement for unanimity in European tax initiatives.
The "enhanced co-operation" procedure can be deployed if requested by a minimum of nine countries. In the sixth year of the financial crisis, the development of the tax comes as governments seek to encourage responsible trading and compel the financial sector to pay for a debacle it largely created. Such levies are typically known as "Tobin" taxes, after US Nobel laureate James Tobin, who proposed a tax on transactions to curtail market volatility in the 1970s.