Tobin Tax in the EU

The Newsite – I’ll permit myself to translate into plain English:

Tuesday the economy and finance secretaries of the European Union discussed the Commissions proposed tax on financial transactions.

Umpire Margrethe Vestager: “We had a very constructive exchange of opinions. It is clear that the Commissions proposal needs more work.”

We really went at it – hammers and tongs – kicking in groins, biting off ears and generally destroying the furniture. No clear winner had emerged when the paramedics broke off the pandemonium.

The German secretary of Finance Wolfgang Schäuble encouraged the Danish leadership this half year to “get a move on”. And come up with alternative ideas – fast.

(He couldn’t use some of  the more popular US Marine expletives, as Vestager is a woman and physiology prevents advice in that genre from being followed!)

“Just because a tax isn’t global is no excuse for doing nothing. Why should financial services be tax exempted?”

The body count showed:

  • Pro tax six: France, Germany, Italy, Finland, Austria and Poland.
  • Against five: Great Britain, Sweden, Czech Republic, Luxembourg and Malta.
  • Undecided one: The Netherlands

The rest had the good sense to keep their mouths firmly shut – presumably to avoid grievous bodily harm.

In this writers humble opinion it is a fall out from the nasty Greek blod- and money letting.

‘Those against are clearly those members that have finance sectors of ill repute. Those pro are those who have had to pick up the tab from the banks vicious thumb-in-the-eye manoeuvres. If Holland actually knew what they were doing remains unclear.

The rush is presumably because the next round (Spain? Said nothing!) is going to be even worse – and Germany and France will NOT tolerate the same behaviour from the banks again.

Schäuble was reported to be “passionate”……

Well that is one state of mind you do NOT want to see a German finance minister in – no matter what.

This is guessing, but …. one false move from a provincial building society and the German banks are nationalised! It is often forgotten that the Austrian banks are in a sorry state – even compared to the generally dismal configuration banks all over the world are in.

One should also remember that Ludwig Erhard after WW2 in the construction of the D-mark simply cut bank deposits (over a trivial limit) with 90%.

If I were a bank manager, I would be genuinely scared. You simply do not play around with a currency Germany is involved with.

Schäuble does not get “passionate” without a plan B – and having the ducks lined properly up.

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About the Author

I have a degree in managerial economics from Aarhus University - specialising in strategy. Have been employed in various firms private, state and semi-state. Branches have been: Transport (rail and ferrylines), mashine industry, building, energy and university administration.

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