Germany mulls transaction tax raise euro bailouts funds
Germany’s centre-right coalition government and the main opposition parties have agreed in principle to introduce a finance market transaction tax in the EU to involve financial institutions in sharing the costs of present and future bailouts.
The agreement, which was hammered out at a joint working of the ruling parties as well as the opposition Social Democratic Party (SPD) and the Green party yesterday, will clear the way for parliament ratifying the EU’s fiscal pact on budgetary discipline and the permanent financial rescue fund the European Stability Mechanism (ESM).
Chancellor Angela Merkel’s coalition government is dependent on the opposition parties to secure a two-third majority to pass legislations on the fiscal pact and the ESM in the Bundestag, the lower house of parliament and to secure the endorsement of the upper house, the Bundesrat, where the opposition holds the majority. The proposed tax will be levied at a level of between 0.01 per cent and 0.1 per cent and it will be imposed on the broadest possible range of financial products.