BRUSSELS (Reuters) - France sought on Tuesday to keep alive a disputed financial transactions tax after 18 months of talks failed to produce a deal that would force banks blamed for causing the financial crisis to help pay for the clean-up.
Having missed a self-imposed year-end deadline to agree the broad outlines of the tax among the 11 euro zone countries that back the plan, French Finance Minister Michel Sapin told other finance ministers a deal was still possible early next year.
“We are not giving up,” Sapin told a news conference. Asked if January 2016 was still a realistic start date for the tax he said: “It’s not a fantasy or a funeral. That is our objective.”
The tax, first proposed in the 1970s to penalise short-term currency speculators, was seized on by France and Germany in 2012 as a political symbol to correct the excesses of the financial sector blamed for the worst crisis in a generation.
But the original plan for a euro zone-wide FTT became mired in disputes over how to levy the tax and whether to include derivatives, with its 2014 start date slipping to January 2016.
Finance ministers from Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain were originally due to sign off on the broad outlines of a deal by a meeting on Tuesday to make possible a 2016 start date.
Despite Sapin’s comments, other ministers say that is also now in doubt, Austria’s Finance Minister Hans Joerg Schelling said. “It is possible but difficult,” he told reporters as he arrived at the meeting.
Often described as a ‘Robin Hood’ tax after the medieval outlaw who robbed the rich to give to the poor, the FTT has wide support in France, where a group of NGOs including Oxfam called on President Francois Hollande on Tuesday to lead on the issue.
Britain, home to Europe’s largest financial sector, has long opposed the tax, fearing it will drive business away from the City of London, while many in the financial industry hope the FTT dies a quiet death.
One EU official described the FTT as being like the legendary Loch Ness Monster because it was proving so illusive. “Everyone’s talking about it, but no one’s ever seen it.”
Sapin’s predecessor Pierre Moscovici, who is now the European Union’s economics commissioner, said the FTT “must not be abandoned” and that adopting it was a moral duty.
Sapin has said one way through the impasse would be to start off with a tax on shares and build up from there, later adding derivatives. Paris believes taxing only share transactions in the 11 participating countries would raise roughly 6 billion euros (4.7 billion pounds) a year.
The European Commission originally said a tax on stocks, bonds and derivatives trades could raise up to 57 billion euros a year if applied across all 28 European Union countries.
Leaving out derivatives, instruments that were seen as fuelling the 2008-2009 financial crisis because of their opaque, complex nature, could undermine the measure as a whole.
“A financial transaction tax must include comprehensive coverage of derivatives, otherwise it is not worthy of the name,” said Sven Giegold, an EU lawmaker for the German Greens.
Writing by Robin Emmott; Additional reporting by Francesco Guarascio; Editing by Catherine Evans