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​‘Robin Hood’ wins: EU to levy Financial Transactions Tax from 2016

Published time: May 06, 2014 14:02
Reuters / Tobias Schwarz

Reuters / Tobias Schwarz

The EU has established a financial accord on an EU financial transactions tax to be implemented from 2016. Eleven EU member states will be imposing a ‘Robin Hood’ tax on financial transactions, after it was proposed in 2011 to counter financial crises.

The tax was proposed three years ago by German Chancellor Angela Merkel and then French President Nicolas Sarkozy to encourage banks to pay for the crippling financial crisis which had struck the eurozone, plunging a range of countries, including Greece, Ireland, Spain and Portugal, deep into debt.

“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 the accord being reached. “I hope we will reach agreement on the assets to be included, mainly shares and some derivatives.”

Once passed, the FTT will be adopted by 11 EU states, excluding Britain, from January 2016. Out of the 27 EU member states, those which will be implementing the tax are France, Germany, Estonia, Spain, Portugal, Italy, Greece, Austria, Belgium, Slovenia and Slovakia.

However, questions regarding how the tax will be imposed and how high it will be are still undecided.

Not all countries have been supportive. London has claimed that the FTT will cause financial damage to British firms.

“The government is determined to continue to ensure that the interests of countries outside of the single currency, but inside the single market, are properly protected,” a UK Treasury spokesman told the BBC last week.

The tax has frequently been described as a ‘Robin Hood Tax’ in reference to the legend of the medieval tight-wearing, anti-poverty campaigner Robin Hood, who supposedly robbed the rich to give to the poor.

“If governments took a tiny tax from international bankers’ transactions, it could generate hundreds of billions of pounds every year,” the UK-based Facebook ‘Robin Hood tax’ page states.

“This is a fight between bankers and Robin Hood,” said Natalia Alonso, a campaigner at Oxfam, told Reuters on Tuesday. “We are saying that the money raised with this tax should go to fighting poverty.”

The promise to impose the tax comes ahead of European elections, during which a swerve to the right has been anticipated. However, experts have stated that difficulties in the reality of implementing the tax mean that the policy could be shelved over the next couple of years, according to Reuters.

“The lack of information on the proposal is a real problem,” Anders Borg, the Swedish finance minister and long-term critic of the project, told the agency.