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German minister suggests alternative to EU Tobin tax

Economics Minister Philipp Roesler floats a British-style bourse tax to get the UK back on board.

Philipp Roesler Enlarge
German liberal party FDP chairman, Economy Minister and vice-Chancellor Philipp Roesler attends the traditional Epiphany meeting of the German free democratic FDP party in Stuttgart, southwestern Germany, on Jan. 6, 2012. (Odd Anderson/AFP/Getty Images)

BERLIN, Germany — Relations between London and Berlin had been frosty ever since British Prime Minister David Cameron vetoed his way into isolation at last December’s summit by blocking a new EU treaty. Now, however, the German government may be seeking to build bridges, by considering an alternative to the financial transaction tax.

Economics Minister Philipp Roesler told the Rheinische Post newspaper that the he could envisage the adoption of a tax similar to the British stamp duty on share purchases in order to get the UK back on side. Germany has a “special interest” in having Britain involved, he said.

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“If the British cannot accept the European model of a financial transaction tax, then it seems to make sense to speak with the British and the other European states about the British model,” he told the newspaper.

Roesler is head of the pro-business Free Democrats, junior partner to Chancellor Angela Merkel’s conservative Christian Democrats. His party has resisted any levy that is confined to just the 17 euro zone states, which has lead to tensions within the already fractious coalition.

Merkel’s spokesman has cautiously welcomed Roesler’s suggestion, while emphasizing Berlin’s preferred option is a financial transaction tax that applies to all 27 EU member states.

"There is no change in the German government's position,” Steffen Seibert said Friday. “The government welcomes the EU Commission's proposal [on a transaction tax], because it encompasses our requests for a broad based tax with a low rate. We will fight for this proposal and for its adoption in all 27 European Union states.”

However, he called Roesler's suggestion "sensible." "He is looking at all possibilities for getting the United Kingdom on board... We need to find out in talks whether a bourse tax could be a bridge for the United Kingdom, then Germany will discuss this with its European partners."

British Prime Minister David Cameron had refused to countenance a financial transactions tax, arguing that such a measure would disproportionately affect the City of London. His opposition to the tax was one of the reasons he gave for vetoing a new EU Treaty to help deal with Europe’s sovereign debt crisis. The other EU members pledged to forge ahead and come up with an agreement without Britain.

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Senior Bundesbank member Andreas Dombret on Friday called on the politicians to make a speedy decision on the financial transaction tax. “The markets would profit from clarity in this matter,” he said.
 

http://www.globalpost.com/dispatch/news/regions/europe/germany/120120/german-minister-suggests-alternative-eu-tobin-tax