Earlier this week, a majority of European Union finance ministers voted to allow Germany, France and nine other Eurozone countries to prepare to introduce a tax on financial transactions.
The so-called Tobin Tax, named after the economist, James Tobin, who first proposed the idea some 40 years ago, is expected to be charged at a rate of 0.1 per cent of the value of any trade in shares or bonds and at 0.01 per cent of any financial derivative contract.
Under EU rules, a minimum of nine countries can cooperate on legislation without all member states using a process called enhanced cooperation, as long as a weighted majority of the EU’s 27 countries give their permission.
Germany and France decided to push ahead with a smaller group after efforts to impose a tax across the whole EU and later among just the 17 Eurozone states failed. The other nine countries going ahead with the tax are Spain, Portugal, Italy, Belgium, Austria, Slovakia, Slovenia, Greece and Estonia.
The UK, Luxembourg, Cyprus and the Czech Republic chose not to participate in the vote, although the UK is not opposed to the tax in principle but, like Sweden, cannot see the point n it unless it is applied globally.
Apparently, agreement over the tax had already been reached before the meeting, so official acceptance by a majority of the Ecofin group of EU finance ministers, which is a requirement of the enhanced co-operation procedure, was merely a procedural matter.
It is only the third time that the voting procedure has been used to enable a select group to go ahead with deeper integration, having previously been used for divorce and patents laws.
The Netherlands, which did not join the pioneer group on this occasion, had been strongly opposed to the tax, but recently elected a new government, whose Finance Minister, Jeroen Dijsselbloem, is supportive of the measure.