30 October 2011

FT: Schäuble calls for EU lead on Tobin tax

Mr Schäuble called for big steps towards a “fiscal union” in the 17-member monetary union to underpin the stability of their common currency. He spelt out his conviction that failure to reach agreement on tougher financial regulation by the full G20 should not stop Europe acting alone.

He insisted that the eurozone was not “on a negotiating trip” to seek help from G20 partners such as China to stem contagion from the Greek debt crisis. “You don’t get any free gifts in the market”, he said. “You must offer sensible investment opportunities.” He denied that Europe would offer political concessions to attract investors.

But he warned that Italy, as one of the largest eurozone economies, must solve its own problems to cut its debt burden.“Italy still has work to do”, he said. “The stability of the euro requires that the big Member States must live up to their own responsibility. Italy must solve its own problems.”

Arguing that further financial regulation was an essential part of tackling the global crisis, he said: “I am convinced that if we introduce a financial transaction tax in the EU, then the chances of getting a global agreement will increase enormously. I would prefer us to reach agreement in the G20. But before we use the G20 as an excuse for doing nothing for a long time, if we cannot reach agreement there, I am in favour of going ahead in Europe.”

He said that he was well aware of the UK government’s opposition to the proposed tax, which will be presented to EU finance ministers on November 8. “I respect their arguments”, he said. “But we must first have a debate at the EU level. It would be wrong to say it is hopeless before we have even discussed it."

“If we cannot reach an agreement at 27, then we must consider whether we should not introduce it first for the 17 eurozone members, in the confident expectation that it will soon be introduced for all 27.”

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