29th January 2016

Future uncertain for FTT

EU´s project for a financial transaction tax has had a difficult road and its implementation is still far from sure. An EU-wide measure was struck down by the UK and other countries, therefore 11 states continued under the enhanced cooperation mechanism. Estonia has since announced it would withdraw from the group, leaving only 10 countries willing to participate. The minimum number is 9, according to EU law. Now, Belgium faces internal political fight over FTT. The right wing Flemish nationalists N-VA are against the tax, although its adoption is supported by the other 3 parties in the coalition government and is enshrined in the coalition agreement. Belgian political parties agreed to support an FTT on shares and derivatives, with no impact on the real economy. That is at the core of N-VA´s argument now – FTT could be dangerous for Belgian pension funds. Tough talks are expected, with the extreme case scenarios being either the break-up of the coalition, or Belgian withdrawal from FTT. That would bring the troubled plan to the bare minimum of 9 countries it needs to continue on EU level. Furthermore, if Belgium steps out, other countries may, too. Slovenia was reported to be questioning the plan.

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Members of the American Chamber of Commerce in the Czech Republic