EU rules prevent tax on financial transactions, says Karas
Othmar Karas has claimed that there would already be a tax on financial transactions if the European Parliament (EP) had the final say.
Karas – who heads the EP delegation of the Austrian People’s Party (ÖVP) – said today (Weds) current European Union (EU) regulations kept the union from acting efficiently. He told the Kurier that the rule that various kinds of changes of European law must be backed by all member states’ parliaments weakened the EU’s ability to act.
Karas also criticised Austrian Social Democratic (SPÖ) Chancellor Werner Faymann. The vice president of the EP said Faymann was dishonest if he called for a continental tax on financial transactions and taxation regulations autonomy for the EU members at the same time. The conservative politician, who has represented the ÖVP in the EP since 1999, said that people “have a good sense for who is telling the truth in politics”.
The Austrian government coalition of SPÖ and ÖVP want a cross-country tax on financial transactions despite mounting scepticism in other EU member countries. The parties controversially considered the possible incomes from such a levy in their recently presented five-year budget plan. The Austrian opposition is generally in favour of a possible tax on financial transactions and stock market deals but highly critical about the government coalition’s approach.
Future tax revenue from an international levy on financial transactions is a crucial aspect of the latest budget consolidation package. The Social Democrats and Vice Chancellor Michael Spindelegger’s ÖVP agreed on the pact in February. Most of the 98 measures came into effect at the beginning of this month. The government hopes that the cutbacks will help to erase the structural budget deficit by 2017. SPÖ and ÖVP are also confident about managing to lower the state debt significantly in the coming years.
Daniel Gross condemned politicians’ actions regarding a possible taxation of financial transactions too. The renowned economist – who researches for Brussels-based think tank Center for European Policy Studies (CEPS) – told the Kurier: “Ninety per cent of all the statements expressed in the current discussion about a tax on financial transactions are hot air. Only 10 per cent might have some substance. It all depends on what kind of tax this is supposed to be. The details are relevant. I do not see any precise measures.”
Gross said it was “dangerous” to assume that a tax on financial transactions would help governments to additional earnings for the public budget in a few years’ time. “No one can seriously predict at the moment whether such a levy will ever come into effect, let alone its volume,” the German economist said speaking to the Kurier.
Luxembourgian Prime Minister Jean-Claude Juncker stressed today that Europe’s federal governments must focus on restoring their states’ budgets in the coming years. Speaking on Austrian radio, the Eurozone head said that people must learn that this was the truth. Juncker told Ö1: “The financial markets have to be regulated more strictly, but they must not be strangled.”
Karas suggested to implement a maximum limit for bankers’ bonuses. He told the Kurier that their bonuses should not be higher than twice their salary. “The most irresponsible banker must not rake in the biggest bonus any longer. Reasonable economic management has to be rewarded, not risky gambling,” the head of the ÖVP’s EP delegation said.