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Reuters reported that the European Commission rebuffed on Saturday an EU legal opinion that questioned the legality of a planned financial transaction tax and said work on the levy in 11 European Union countries would go on. "We are confident that the Commission's arguments and arguments of the legal service of the Commission will demonstrate very clearly to our Member States that the approach which has been taken in the proposal is the correct one and does not breach any provisions of the Treaty", said European Commissioner Algirdas Semeta, who is responsible for taxation told reporters.
As reported by Financial News however, industry experts believe the fate of the FTT rests with German voters. Francesco Guelfi, a tax partner at law firm Allen & Overy, said: “The Germans have been big supporters of the FTT to date. If it changes its mind, if there is a different coalition of the parliament, it would, of course, have a significant impact.”
Opinion polls suggest the current coalition, including Merkel’s Christian Democratic Union and the pro-business Free Democrats, is looking more likely to win than at any point in the past six months. However, there is also a strong chance of a coalition between the Christian Democrats and the left-leaning Social Democrats, which could ultimately result in a more punitive FTT.