Commission criticised member states on blocking financial transaction tax

European Parliament. Committee on Budgetary Control (CONT) Meeting
with EU Commission member Algirdas Semeta. (EC Audiovisual Services, 21/1.2014).

European Commissioner Algirdas Šemeta, responsible for Taxation and Customs Union, while speaking yesterday at the plenary of the European Parliament, accused openly some of the 11 member states which have initially agreed to introduce the Financial Transaction Tax, that they are dragging their feet, letting those lobbies which oppose the tax to actually block any progress. He plainly said “strong vested-interest groups have worked tirelessly to impede progress, over-estimating the threats and negative impact of this tax. And this has created some apprehension amongst the Member States”.

What the Commissioner clearly implies here is that some of the 11 member states, which a long time ago agreed to introduce the FTT are now having second thoughts, influenced by interest groups which oppose the introduction of this tax. This said, Šemeta reminded every body that according to the latest Eurobarometer survey, the introduction of the FTT is backed by 64% of the European citizens and it was one of the most popular promises made by EU politicians. He concluded then that in view of the May European election, this is the time to deliver by adding “Our leaders should keep this in mind when considering the proposal, especially as the May elections come ever closer”.

Direct threats

The Commissioner stopped short of saying that if the FTT is not adopted before the elections, nobody should be surprised if the new European Parliament turns out to be full of Eurosceptics and extremists. It’s not without reason that all public opinion polls give those political groups a resounding influence on voters. All those years after the financial crisis, the major European banks received trillions from taxpayers and now ask for more. Most Europeans are convinced that their political leaderships favour the financial sector to the detriment of the real economy.

That’s why voters are abandoning the mainstream political parties favouring until recently marginal extremist groups on both sides of the spectrum. He stated though that “Europe needs to reconnect with its citizens. And the FTT is a prime example of a project which can help to achieve this”. Obviously the accusation is very simply, that EU politics and politicians have distanced themselves from the people, favouring other interests.

One minute later, the Commission told the Parliamentarians that “Last July, you strongly supported a design which offered a balance between efficiency and delivery. You identified the sensitive areas in this file, and offered strong and credible solutions. You adopted a realistic approach, without losing the ambition for results. I find myself wondering why the 11 Member States have not been able to do the same – especially as they asked specifically to proceed with this project under
enhanced cooperation”.

Helping the politicians help themselves

This is a rhetoric question that Šemeta directly answered some minutes later by offering a compromise. He said “If we want results, we must nurture what can be achieved, rather than relentlessly pursue what cannot. The Commission has always been clear that it would not stand in the way of an agreement on the FTT, as long as the final compromise does not open the way for avoidance or distortions, and does not alter the rights of the non-participating Member States. In this context, there would be nothing wrong with a gradual implementation of the tax, if that is what the Member States are more comfortable with”.

In this way, the Commissioner opens the way for the adoption of the FTT before the May European election. Unquestionably, his proposal is meant to help the politicians who will ask the Europeans to vote for them in May. It’s like the Commission helps the politicians without their consent.