Schaeuble Says EU ‘Avoids Total Failure’ With Financial Tax Plan

German Finance Minister Wolfgang Schaeuble said a fresh proposal for a 10-nation European financial transaction tax was a “small step” forward, though doubts remain that a deal can be reached.

Austrian Finance Minister Hans Joerg Schelling presented the proposal to the group on Thursday. Task forces will study the two “technical issues” that remain to be solved, and will report back in September, when “there will have to be a final decision,” he said.

“Thanks to the efforts of the Austrian presidency of our group on enhanced cooperation we were able to avoid the total failure of the financial transaction tax,” Schaeuble said after a meeting of EU finance ministers in Luxembourg on Friday. “We still have 10 countries that agreed to continue work on the basis of the agreed principles.”

Plans for a transaction tax already failed among all 28 EU nations, and the current talks are seeking a compromise among a smaller group that sought to press on under “enhanced cooperation” rules, which require consensus from at least nine nations. The countries still involved are Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain.

“As you can imagine, work on this file is very complicated and difficult,” Harald Waiglein, director general for economic policy and financial markets in the Austrian Finance Ministry, said on Friday. After yesterday’s meeting, the 10 countries “have a strong convergence of views on the core design principles” of the tax, he said. “Further reassurances are needed on two issues.”

The two outstanding issues involve applying the tax to derivatives, which “should not have a negative impact on public borrowing costs,” and making collection of the tax cost-effective, Waiglein said.

Schaeuble reiterated Germany’s support of the plan on Friday.

“We continue working on it with all our force, because a small step is better than having no agreement at all,” he said.

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