herald

Monday 11 December 2017

Ireland opts out of new tax on banks

NINE European countries are to go ahead with a new "Robin Hood" tax on banks -- but Ireland has opted out.

Ireland will not be a part of the core group so long as the United Kingdom remains outside it, Finance Minister Michael Noonan said.



function

The call for an EU financial transactions tax (FTT) was suggested by Brussels as the eurozone crisis deepened, partly to show that banks were sharing the bailout burden.

Britain insists that such a tax would have to apply globally to function fairly.

At talks between EU finance ministers in Luxembourg, an inner core of nine governments -- including Germany, France, Italy, Greece and Poland -- decided to press ahead alone.

Minister Noonan said: "We have stamp duty on transactions at 1pc. We don't want to go beyond that at present."

Nine countries had agreed to forge ahead and most of the remaining 18 countries had decided not to block the idea, according to Mr Noonan.

An FTT is the price German opposition MPs extracted from Chancellor Angela Merkel in order to support the fiscal compact in a Bundestag vote next week. It is supported by France.

One idea is that it could create a fund to cushion taxpayers from having to bail out banks, observers said.

Under the enhanced co-operation procedure, an FTT can go ahead among a core group of countries -- but only if there is no impact on the internal market and if it does not adversely affect other countries that are not involved.

The nine countries have asked the EC to now bring forward proposals on how such an FTT might work among a core group of countries.



transactions

Supporters of the tax condemned the UK's failure to take part as "untenable".

However, UK Chancellor George Osborne refused to budge, insisting the tax would hurt the European economy, as financial transactions were routed to countries outside the EU.

"I would have thought we want to be attracting business rather than the other way around," Mr Osborne said.

hnews@herald.ie

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