The EU’s failed financial tax: good and bad news

The German Frankfurt Stock Exchange’s bull surrounded by sandbags
EU talks on a Tobin tax have stalled, marking a defeat for those who see capital markets as evil, like protesters who barricaded the stock exchange in Frankfurt, Germany (source: dpa)
  • Talks between 10 EU states on a financial transactions tax have stalled
  • Discussions were held in the ‘enhanced cooperation’ format
  • At most, those states will implement a watered-down version of the tax
  • The result is good for markets, but also strengthens trends toward centralization

Ten European Union members recently tried once again to introduce a tax on financial transactions – the so-called Tobin tax. Despite agreement on the general principle, some countries are hesitating. Others seem less than eager to reach a conclusion soon: the revenues appear relatively modest and the risk of encouraging companies to migrate to more tax-friendly locations is substantial.

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