EU Moves Ahead With Transaction Tax in Rejecting U.K. Changes

The European Union has moved ahead with a plan to design a financial-transaction tax for participating nations, rejecting the U.K.’s requested changes to the proposal, an EU official said.

The U.K. had sought a series of wording changes to the European Commission’s proposal, according to documents obtained by Bloomberg News. National ambassadors to the EU on Nov. 30 rejected those changes and opted to seek European Parliament approval with the commission’s existing language, the official said on condition of anonymity because the deliberations are private.

All 27 nations and the EU parliament must agree for the Brussels-based commission to design a tax for 11 willing nations under so-called “enhanced cooperation” procedures. Skeptical nations that won’t take part, such as the U.K. and Poland, have said they won’t allow the smaller group of countries to proceed unless they know what to expect.

Accepting the U.K.’s wording request would have been an unjustified step backwards on the proposal, a European Commission official said.

The commission’s proposal says that the plan, as currently offered, fulfills treaty requirements to avoid damage to the single market or other nations. The U.K. amendments would have stated that the final proposal “should” avoid such discrimination, according to the documents.

Single Market

The U.K. suggested the changes as part of its efforts to make sure the proposal doesn’t harm non-participating nations or the EU’s single market, said a British diplomat who asked not to be named in line with government policy. According to EU documents, 16 nations wanted to advance the proposal while 10 objected and Cyprus, which holds the EU’s rotating presidency, abstained.

Countries that have signed on to the transaction-tax plan are Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia. Once the commission receives the go-ahead it can design the details of the proposal, which will require unanimous support from participating nations.

To contact the reporter on this story: Rebecca Christie in Brussels at rchristie4@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net