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28 May 2013

Germany: Financial transaction tax unlikely to come in soon


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German government officials are playing down prospects for introducing a financial transaction tax in the near future, after a member of the opposition Social Democrats (SPD) broke ranks and described the project as "rubbish".


The SPD has been a driving force behind the tax, which would force the financial sector to contribute to the costs of future crises and has won the backing of 11 eurozone states. But Nils Schmid, the SPD finance minister from the state of Baden-Württemberg, said banks might not be able to cope with the additional burdens of the levy.

Finance ministry spokesman Martin Kotthaus said the issues raised in Schmid’s letter would be discussed in Brussels. "We will tackle the issue very thoroughly and carefully”, he said at a regular government news conference, adding that there must be a solution “that we can all live with". Kotthaus said it would be unrealistic to introduce the tax quickly and no revenues from the tax were planned in the 2014 budget. Until now 2014 has been cited as the start date. The current plan it to set the tax at 0.1 per cent for equities and at 0.01 per cent for derivatives.

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