Europe will revive the 'Tobin tax'

Abstract

Subject Outlook for the introduction of a financial transactions tax. Significance Ten euro-area countries, led by Austria and France, have kickstarted plans to revive a 'Tobin tax' proposal, which will introduce a financial transactions tax (FTT) in two stages, the first by January 1, 2016 and the second a year later. Although FTT opponents, led by the United Kingdom, sank any EU-wide measure, the smaller group is now determined to go it alone with a measure that would apply only within these countries and to a broad range of transactions, including derivatives, at low rates. Impacts The European Commission will assist in addressing necessary technical issues. An FTT on a wide range of derivatives raises implementation challenges that cannot be solved according to the proposed timetable. The United Kingdom may subject any agreed FTT to further legal challenge before the European Court of Justice (ECJ).