- Current proposal among 10 nations found to be unacceptable
- Belgium will stay at negotiating table for now, ministry says
Belgium considers the European Union’s current 10-nation plan for a financial-transactions tax to be unacceptable, Finance Minister Johan Van Overtveldt said.
The government will remain in negotiations with France, Germany, Italy and other plan participants, the finance ministry said. At the same time, Van Overtveldt in a statement Saturday said the most recent plan is out of step with the proposal the Belgian government accepted when it initially endorsed the tax proposal.
“This proposal could complicate hedging and can have adverse effects on businesses,” Van Overtveldt said. “The current draft would raise the cost of financing the public debt and threaten the liquidity of government debt."
Efforts to build a joint European transactions tax have foundered in the past four years amid disagreements over which trades to tax and how to allocate the revenue. In December, Estonia left the negotiating group while 10 nations agreed on principles for going forward and set a mid-2016 deadline to reach a deal.
German Finance Minister Wolfgang Schaeuble said in December that the current plan, while not perfect, needs to advance so other nations will feel pressure to join. “To do nothing, to resign, to say OK, this problem isn’t solvable, I’m sure we will suffer the next major crisis,” he said in public debate at a Dec. 8 finance ministers’ meeting.
A transactions tax must not target pension funds and needs to focus on speculative trades, Van Overtveldt said. He said the current proposal poses risk to Belgium’s financial industry and doesn’t safeguard economic actions such as transactions that large companies and small businesses use to shield against movements in commodity prices, exchange rates and interest rates.
If only 10 nations move ahead with a transactions tax, it also would run counter to EU efforts to foster a capital markets union, the Belgian ministry said. The European Commission, which backs the trading tax, is working on proposals to increase financial integration among all 28 member nations.
Nations still participating in the tax talks are Austria, Belgium, Germany, Greece, Spain, France, Italy, Portugal, Slovenia and Slovakia.
Belgium’s conclusion on the tax plan was reported earlier Saturday by L’Echo newspaper.