(AP) LONDON — Taxing financial trades has been touted as a panacea for all kinds of global ills, a cash source to fight poverty and global warming. But the latest European attempt to introduce a worldwide standard 40 years after it was first conceived is facing stiff opposition from the U.S. and Britain.
Jose Manuel Barroso, the president of the EU’s executive arm, on Wednesday threw his weight behind the tax that his office estimated could raise euro57 billion ($77 billion) a year in Europe to help combat a debt crisis that is threatening the euro currency.
“In the last three years, member states have granted aid and provided guarantees of euro4.6 trillion to the financial sector,” Barroso said. “It is time for the financial sector to make a contribution back to society.”
The tax would be a tiny percentage of the value of a trade in assets like stocks and bonds. Although some countries already have a minimal duty on share trading, the new proposal would not only increase the scope and size of the tax but also siphon off some revenue to Brussels.
The European Commission has formally backed the tax to take effect from January 2014.
As a result of the financial crisis in 2008 and the ensuing recession, debt levels across Europe, and not just in the bailed out countries of Greece, Ireland and Portugal, have risen sharply. Across the 27-nation EU, debt as a percentage of national income has spiked from below 60 percent in 2007 to 80 percent this year.
Though the tax could dent growth and employment, it has won a fair degree of support across the 17-country eurozone, including France and Germany, the EU’s two biggest economies.
