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EU official rules out financial transaction tax for 2014

A tax on financial transactions within the EU is increasingly unlikely after a group of legal experts has found it clashes with EU laws. A senior EU official has now admitted the tax won’t come in 2014.

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EU transaction tax doubtful

An EU plan to introduce a tax on financial transaction next year had to be ruled out, a spokesperson for EU tax commissioner Algirdas Semeta told the German newspaper Süddeutsche Zeitung on Wednesday.

The tax was no longer on the agenda of an EU Finance Ministers meeting later this year, aimed at outlining the program for Lithuania's EU presidency lasting until the end of 2013, the unnamed spokesperson was quoted as saying.

Furthermore, reaching agreement next year on the tax could be achieved only with a major political effort, the spokesperson reportedly said.

Spearheaded by France and Germany, a group of 11 EU member states are seeking to go ahead with a tax on all financial transactions next year, under efforts to make financial institutions repay part of the losses from the financial crisis they caused.

However, a panel of EU lawyers said on Tuesday the planned levy on trade in shares, bonds and financial derivatives would discriminate and disadvantage those countries which did not adopt it.

As a result, the financial transaction tax was incompatible with the current EU Treaty, said the lawyers, who were commissioned by the European Council – the EU's political arm comprising member countries.

According to the Süddeutsche Zeitung, the EU Commission had largely finished work on a draft bill, which was planned to be submitted to the member states soon.

uhe/mz (epd, AFP)

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