A common European financial transaction tax could drive away companies and hurt the growth outlook, Maltese Finance Minister Edward Scicluna said as finance ministers from Greece, Germany, France, Italy and seven other countries met on Monday in Brussels to discuss how to design a tax for interested nations.
Scicluna said Malta, which isn’t one of the 11, shares the participants’ concern that an improperly designed tax could cause economic harm.
“Talking to countries who are in favor, we have the same concerns: We both wish that the business won’t go elsewhere,” Scicluna said in an interview in Brussels.
Germany and other supporters have made clear that they’ll withdraw support if the design looks likely to drive firms away from the region where the tax takes effect, he said.
Work on a transaction tax for the 11 willing nations began 14 months ago, after a European Union-wide proposal failed. So far, the participants have remained committed to the cause without finding agreement on how the tax could work.
“We know that we can only proceed step by step,” German Finance Minister Wolfgang Schaeuble said on Monday.
“The possibilities, the situations and the interests of the individual participating states are so different that only a limited taxation of shares and some derivatives is possible in a first step.”
All 28 EU nations will take part on Tuesday in a discussion on the tax plan’s state of play, allowing non-participating countries such as the UK to raise concerns about potential spillover effects.
Germany, France, Spain, Italy, Belgium, Austria, Portugal, Greece, Estonia, Slovakia and Slovenia are the countries that have signed on to the transaction tax effort.
Backers say the tax is needed to raise revenue and limit risky market speculation.