13 May 2013

EACT position concerning the Proposal for a Council Directive implementing enhanced cooperation in the area of a financial transaction tax

The EACT  broadly supports the stated objectives of the proposal for a Financial Transaction Tax (FTT) – on the one hand, to ensure that the financial sector makes a fair and substantial contribution to covering the costs of the financial crisis and on the other, to create disincentives for certain financial activities that it may be agreed do not bring added value for the overall economy. In general terms EACT is supportive of reforming the financial sector in order to avoid future financial crises and to ensure that it better serves the interests of the real economy. However, EACT strongly believes that the FTT will not deliver on the above‐mentioned objectives. It will on the contrary add further difficulties to the struggling European economy. The tax’s impact on the real economy has not been properly assessed and recognised during policy formulation. The FTT will cause serious damage to companies, pension funds and individuals as users of financial  services, by directly and indirectly burdening them with additional costs.

The FTT will not in the end fall solely on the financial sector and force it to make a fair contribution to the costs of the financial crisis but will do just the opposite. It will fall on companies in the real economy and compound the negative effects of the financial crisis that businesses have already experienced. In the current economic context this outcome is the opposite of what EU policy should be  addressing.

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