November 8, 2011
EU Finance Ministers Clash Over Transaction Tax
European Union finance ministers clashed Tuesday over a proposal to implement a financial transaction tax only days after the U.S. declined to give such a levy firm backing at a summit of the world's 20 leading and developing economies.
France and Germany have championed the tax in recent months, with French President Nicolas Sarkozy describing it as technically possible, financially necessary and morally unavoidable. He said the tax could be implemented as soon as 2012.
Meanwhile, big European economies outside of the euro zone reiterated their stand against the tax at a meeting of finance ministers in Brussels.
Sweden's finance minister Anders Borg went so far as to doubt the calculations in the proposal made by the European Commission. He said there is a risk the commission is underestimating the cost for growth and overestimating the revenue gains from such a tax.
Mr. Borg also said a transaction tax would reduce turnover on the secondary market for government bonds, which would push up borrowing costs, further exacerbating the sovereign debt crisis.
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