Barnier pushes for European transaction tax

EUROPEAN COMMISSIONER Michel Barnier has said there is a need for a "complete solution" for a European Union transaction tax.

Barnier, (pictured) who is commissioner for internal markets, said a financial transaction tax (FTT) involving all 27 European member states makes both "economic and financial" sense. Lowtax reports.

In September, the European commission suggested a tax of 0.1% on equity and bond transactions and 0.01% on derivatives, which it estimated could raise €55bn (£46bn) a year.

Barnier said the tax would be politically "fair" as well as technically simple, maintaining that once created, the levy will be "financially productive" and will "stand up economically".

Earlier this month it was revealed just three member states backed such a move, according to KPMG research. Just France, Germany and Spain were in favour of an EU wide tax.

However, nine European countries have addressed a joint letter to the Danish Presidency of the European Union calling for an accelerated approach to FTT.

Italy's prime minister, and the finance ministers of Germany, Austria, Belgium, Spain, Finland, France, Greece and Portugal have all signed a letter that they believe the FTT is necessary at EU level to "ensure a fair contribution from the financial sector to the cost of the financial crisis".

The letter also requested the Daniesh presidency sped up the process so that a directive of the bill becomes available in the first half of this year.