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After a meeting between the Finance Ministers of EU-countries in Luxembourg last Saturday, there has been renewed momentum in the discussion surrounding a planned European financial transaction tax. According to Austrian Finance Minister Hans Jörg Schelling, the eleven Euro countries in favour of the tax have agreed in principle to a common tax model. A technical committee is to work out the details before the next meeting of the Council of EU Finance Ministers takes place in October.
Boerse Stuttgart urges officials to bear in mind the interests of private investors when implementing the tax. Dr. Christoph Boschan von dem Bussche, Managing Director of Boerse Stuttgart GmbH, stresses: “We welcome a tax on financial transactions insofar as it applies to those responsible for the financial crisis and contributes to market stability. But important steps are needed if legislators’ goals are to be achieved. These include exceptions for both private investors and liquidity providers at exchanges. Private investors did not cause the financial crisis. On the contrary, they paid heavily in the aftermath. They also pay capital-gains tax and invest earned income that has already been taxed.”
Likewise, an exception for liquidity providers is essential to ensure the proper functioning of capital markets. Boschan von dem Bussche recalls: “Exchange operations that merely serve the goal of making necessary liquidity available must not be taxed. This is the only way we can ensure that trade in shares in small and middle-sized companies remains liquid. If markets dry out, capital costs will rise sharply and EU citizens will have to bear the burden.”
