Today, EU finance ministers met in Luxemburg and took a massive step forwards, bringing a Robin Hood Tax closer to realisation than ever before. They did so by agreeing that they couldn’t agree an EU-wide tax, a major victory for campaigners. Confused? Then let me explain.
It has been clear for months that an EU Robin Hood Tax was impossible to achieve under current conditions. EU taxes require unanimity, and the UK is not alone in vetoing any such agreement. The only way to make progress on the European Commission’s draft directive on a financial transactions tax, therefore, is for a smaller group of countries to do it on their own: known in EU treaties as the Enhanced Co-operation Procedure (ECP).
But before an ECP can be initiated, the whole EU has to agree that unanimity cannot be reached. And several countries who wanted to delay matters were unwilling to agree that they couldn’t agree. The Danish Government who currently hold the EU Presidency and therefore decide the agenda for meetings even went so far as to put the issue at the end of the agenda in the hopes that Ministers from France and Germany would have to leave early, thus postponing a decision until the Cypriots take the Presidency next month! Several countries objected, so the discussion took place before lunch instead, and resulted in a clear view that unanimity was unachievable.
One final hurdle that needs to be overcome is that ECP needs at least nine governments involved. That hurdle has also now been overcome, and at least ten countries, maybe more, will now proceed to discuss the adoption of a financial transactions tax covering about 80% of the EU economy, including four of the five biggest economies in Europe.
A week of lobbying finance ministers and leaders was capped by a final stunt in Rome where the leaders of those four economies – France, Germany, Italy and Spain – met this afternoon. Representations of the four leaders united with a female Robin Hood to put a winning goal past a banker. Robin Hood Tax campaign spokesperson David Hillman said:
“We are delighted that a coalition of European countries has agreed to press ahead with a financial transaction tax. But the UK public will rightly be angry that George Osborne is resisting efforts to make the City pay its fair share.”
The decision to proceed with ECP was announced on twitter by EU tax commissioner Algirdas Semeta who wrote:
“ECOFIN opened the way for enhanced cooperation on Financial Transaction Tax, significant number of Member States are in favour.”