As with most things in Europe, Germany is central to the future of the FTT, says Wright in this FN article. While Germany is among the countries pushing for the levy, the proposal stands a chance. Were Germany to pull out, the remaining nine countries would almost certainly lose the will to press on.
Last month the Social Democrats laid out their programme for government... The biggest sticks were calls for the separation of investment and retail banking along the lines of the original Liikanen proposals and, natürlich, the FTT.
In response, Chancellor Angela Merkel’s Christian Democrats appear to be simultaneously attempting to outflank and cosy up to Social Democrats by adopting most of their policies. This denies the Social Democrats the ammunition they need to fire broadsides at the government while also opening the door to them as potential coalition partners. But at the same time, the Chancellor can’t risk alienating her current (and also potential future) coalition partners, including the liberal and pro-business Free Democrats.
It is therefore clearly in the Christian Democrats’ interests to remain relatively non-committal on the FTT and keep their powder dry. Then, following the election, if Merkel needs to do a deal with the liberals, she can promise to scrap or water down the FTT. If she needs to do a deal with the Social Democrats, she can promise to push it through. This is why Germany is perfectly content not to rush the proposal through the European Parliament: if the fate of the levy is decided before September, it will reduce the Christian Democrats’ political leverage.
Back in Brussels, the pro-FTT MEPs want the levy decided on by the autumn when they will set off on the campaign trail ahead of their own Parliamentary elections next year. The timings appear mutually exclusive. Whose priorities - those of Brussels or Berlin - will win out? It seems a waste of ink to even bother answering that.
It is clearly far from ideal that a potentially far-reaching financial regulation is likely to hinge on political machinations in Germany. What happened to European union? What, for that matter, happened to the single market? All eyes will be on the Bundestag as the election campaign hots up over the summer. When it comes to the FTT, and despite the fact that most of us don't have a vote, we're all Germans now.
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