The Global Reach of the Proposed EU Financial Transaction Tax Directive: Creating momentum through internal legislation?
Title: The Global Reach of the Proposed EU Financial Transaction Tax Directive: Creating momentum through internal legislation?
Author: VAN VOOREN, Bart
Series/Number: EUI RSCAS; 2012/28; Global Governance Programme-23; Global Economics
In the wake of the 2008 financial crisis, taxation of the financial sector has forcefully re-emerged on the European Union political agenda. One proposal – rightly or wrongly – received much political attention: a broad-based tax on financial transactions. What had for years existed as a utopia in the minds of grass roots movements, reached a legal and political milestone during Commission President Barosso’s State of the Union speech on 28 September 2011. There he presented a proposal for an EU Directive on a financial transaction tax installed across the 27 EU Member States. It was then an explicit objective of the Union that it would lead by example, and that its pan-European implementation would prove the global feasibility of a financial transaction tax (FTT). The Cannes G-20 Meeting early November 2011 under French chairmanship was expected to launch the global dimension of the FTT, using the momentum created by the proposed EU FTT Directive two months earlier. However, the European sovereign debt crisis caused the EU to teeter on the brink of political, financial and economic collapse, and momentum for a global FTT seemed utterly lost. Nonetheless, political discussions within the Union continued, and at the time of writing – Spring 2012 – discussions in the Council were on-going for some form of pan-EU. The global implementation of the EU FTT Directive is a tale of divided political views between Member States of the Union, the pursuit of an elusive single voice in the G-20, and the use of legal instruments for political reasons. In this paper, it will serve as a case-study for the EU seeking to shape global financial governance in the wake of the 2008 financial crisis, in line with its binding, law-oriented mission statement of Article 21 TEU. In light of this, this contribution investigates EU (im)potence to affect legal and institutional processes in global (financial) governance.
Subject: Financial Taxation; European Union; Global Financial Governance; G20
Type of Access: openAccess