EU money deals tax will go ahead

A MAJORITY of euro zone countries have signed up to a financial transactions tax aimed at making banks pay up to help economic recovery.

Eleven of the 17 countries in the euro zone will adopt the tax, most likely next year, and these countries represent 85% of the GDP of the euro zone.

The agreement is seen as a success for France and Germany, which were both keen to bring it in (Hollande having taking up the baton from Sarkozy, who also supported it), though Britain rejected the idea as being too harmful to the City of London.

It was originally intended the tax would apply to the whole EU, but agreement proved impossible. The tax will only apply to the countries that have voted for it and the exact rules and the use of the revenue have yet to be agreed.

However the original plan discussed was for a 0.1% tax on share and bond deals (eg. €1,000 on a €1million deal) and 0.01% one on other transactions (€100 on a €1million deal), which it was estimated would bring in around €55billion if applied to the whole 27 EU states.

The tax will be created though a fairly new procedure called reinforced cooperation,” whereby a group of states can put in place a policy applying just to themselves, without waiting for the whole 27 to agree.

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