Following the session, the breakaway group said it needed further technical analysis of the effects of a financial transactions tax on pension funds and the real economy before the next meeting, which is scheduled for late March, reports CCH Daily.
In a statement, the Belgian finance minister, Johan Van Overtfeldt, pointed out that the ‘safeguarding of pension funds’ is one of the provisions of the federal government’s coalition agreement. The Belgian occupational pensions association has been critical about the effect it believes the financial transactions tax would have on pension funds in the country.
Van Overtfeldt suggested the group had discussed whether a pension fund exemption should apply in general or if member states should be able to work with an individual ‘opt-out clause’.
His statement also noted that a ‘number of member states also pointed out the international economic context which is very volatile at this point, due to Brexit and possible new financial regulations in the US for example’.
Pierre Moscovici, the EU’s tax commissioner, said three positions were put forward on pension funds in the talks.
‘Some believe that there cannot be any kind of exemption on this matter. Others say there should be an exemption, but that would be a risk for the nature of the proposal itself. So there was a third option that emerged, which is basically proposed by France and is a kind of opt-out, with or without compensation, and we are now going to technically work on those three options,’ he said.
Wolfgang Schaeuble, the finance minister for Germany, warned that the increasing demands for exemptions could risk the basis for the financial transactions tax in media interviews.
Schaeuble said: ‘The desire for exemptions is growing. Even a Swiss cheese needs more than holes. There has to be something in between them, otherwise it’s just a hole, not a Swiss cheese.’
Plans for an EU-wide financial transactions tax were first proposed in 2011 and ran into substantial opposition from the UK and others. The proposal at that stage was to harmonise the tax base and set minimum rates for all transactions on financial markets, once at least one EU financial institution was involved in this transaction. The minimum tax rates proposed were 0.1% for the trading in shares and bonds, and 0.01% for derivative agreements such as options, futures, contracts for difference or interest rate swaps.
The European Commission was unable to secure agreement for a financial transactions tax which applied to all 29 member states. Subsequently a breakaway group, which comprises Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia and Slovenia went ahead with their own plans for the levy, operating under the EU’s ‘enhanced cooperation’ rules.
Originally the group expected the scheme to go live by 2014, but there have been numerous delays.