Germany's "Robin Hood" €57billion tax on EU banks: do you agree with it?

Dionysus

People are often saying why don't the banks pay more for this crisis which is largely of their own making. So now the Germans are proposing a €57 billion tax on financial institutions. It will tax trading in stocks, bonds and derivatives. Noonan said Ireland would be prepared to accept such a tax on condition that Britain did; otherwise Ireland would be at a disadvantage. Britain, alone in the EU, has rejected such an EU-wide tax claiming that the City of London would lose many of its financial corporations if it happens. The Germans are saying if they cannot get EU-wide support, they will try to have this tax for corporations based in the Eurozone only, something which would benefit Britain hugely and disadvantage Ireland.

Are the Germans correct to promote such an EU-wide tax, or should the EU step back and avoid such taxes in case these financial institutions move outside the EU?






Germany defiant on 'Robin Hood' tax:


German finance minister Wolfgang Schaeuble vowed in an interview published today to push ahead for a financial transaction tax in the European Union in 2012 despite objections from Britain that it could harm London as a global financial centre.

Mr Schaeuble also told Bild am Sonntag newspaper that Europe's sovereign debt crisis would not trigger a financial market crash in 2012.

"I consider the situation to be controllable," Mr Schaeuble said referring to the prospects of collapsing markets. "In the EU there's a high degree of determination among the member states to stabilise the situation.

"There will certainly be some surprises and bouts of excitement along the way but we're capable of managing the situation. I'd advise everyone to have a bit more serenity about it all."

Mr Schaeuble (69) added he was confident that investor confidence in the euro zone would return despite all the turmoil related to the sovereign debt crisis in recent years.

"Europe is one of the strongest economic regions in the world and investors want to put their money in places where they can earn profits," he said.

But he added it was essential that highly indebted countries reduce their deficits and debts while improving their competitiveness. He said it was important that a European economic government needed to be established.

Mr Schaeuble said Germany would continue pushing for a financial transaction tax. He said if it cannot be introduced in the EU as a whole then at least in the euro zone.

"In the EU we've agreed to explore the chances of a financial transaction tax in the first months of the new year," he said. "If the hurdles are too high then Germany and France will push for introducing the tax only in the euro zone."

The European Union's executive proposed a bloc-wide tax on financial transactions it said would raise €57 billion a year even though. Banks called the plan nonsense and Britain said it would only support a global levy.

The EU's executive European Commission formally adopted plans in September for a financial transaction tax, which will need unanimous approval from EU states. Under the plan, stock and bond trades would be taxed at the rate of 0.1 per cent, with derivatives at 0.01 per cent.

The EU executive said the tax would be imposed on all transactions in financial instruments between financial firms when at least one party to the trade is based in the bloc.

Mr Schaeuble said he wanted to see the tax now.

"I don't want to wait until such a tax is introduced worldwide. Otherwise we would risk not only the stability of our financial markets... but we would also be endangering the legitimacy in the public eye for the entire system.

"That's why I'm fighting with such determination for a financial transaction tax. It might not be able to stop the ludicrous developments in financial markets but it would at least brake them a bit." Mr Schaeuble said he wanted the tax to slow down the pace of financial transactions and possibly make some speculative business unprofitable.

"The markets are a bit too preoccupied with themselves these days rather than supporting the real economy," he said. "We've got to decelerate the pace of transactions." He said he wants to see Europe out in front with a financial transaction tax.

"I'm very much in favour of Europe leading the way," he said. "That can possibly mean that certain speculative business models are no longer profitable. But that is what we want."

---

Fishooks12

I'm no economist but would taxing the banks lead to these institutions being even more reluctant to provide financing and loans, thus stifling economic growth even more?

Dionysus

No

Fishooks12 wrote: »

I'm no economist but would taxing the banks lead to these institutions being even more reluctant to provide financing and loans, thus stifling economic growth even more?

Many of them are, surprisingly enough, back making massive profits. They're even declaring very good profits:

€942m third quarter profits at Deutsche Bank (25 Oct 2011)

€662m third quarter profit at Societe Generale (8 Nov 2011)

HSBC profits of $11.5bn in first 6 months of 2011 (1 Aug 2011)


Multi-million pound bonuses to bankers are now back in at least one country's financial institutions already:
Banks and ABI to hold talks over 'out of control' bonuses

Mike 1972

No

Id agree with it provided its not implemented on a "per transaction" basis which would only lead to it being passed onto customers in new/increased bank charges.

Dionysus wrote: »

Britain, alone in the EU, has rejected such an EU-wide tax claiming that the City of London would lose many of its financial corporations if it happens.

How exactly would this happen if it applied to all 27 EU states equally ? More bloody Daily Mail (or possibly Daily Telegraph -given who its proprieters are) inspired shyte I reckon.

Biggins

I am just tired of frigging Germany and France shoving stuff down the throats of the people in Europe.
Honestly, if Sarkosy or Merkel was stood in front of me, I wouldnt be my normal polite self.

44leto

This is bad for us, you can kiss the Ifsc jobs of which there is a lot, goodbye. Also there is no-way Britain will forego its London city revenue so they can't sign this deal.

There is unsure times ahead.

padd b1975

Biggins wrote: »

I am just tired of frigging Germany and France shoving stuff down the throats of the people in Europe.
Honestly, if Sarkosy or Merkel was stood in front of me, I wouldnt be my normal polite self.

Sorry to be pedantic, but by the law of averages the French lad would be stood beneath you, unless he had his platforms on.

K-9

Fishooks12 wrote: »

I'm no economist but would taxing the banks lead to these institutions being even more reluctant to provide financing and loans, thus stifling economic growth even more?

I don't know, that one kind of reminds me of the arguments about new worker rights. Basically, they would say that, wouldn't they.

44leto

K-9 wrote: »

I don't know, that one kind of reminds me of the arguments about new worker rights. Basically, they would say that, wouldn't they.

They would, but the reality of globalisation is banks can operate anywhere and they could move to a zone that does not impose this tax overnight.

Yahew

No

Mike 1972 wrote: »

Id agree with it provided its not implemented on a "per transaction" basis which would only lead to it being passed onto customers in new/increased bank charges.


How exactly would this happen if it applied to all 27 EU states equally ? More bloody Daily Mail (or possibly Daily Telegraph -given who its proprieters are) inspired shyte I reckon.

presumably the idea is that the financial sector goes to America.

44leto wrote: »

This is bad for us, you can kiss the Ifsc jobs of which there is a lot, goodbye. Also there is no-way Britain will forego its London city revenue so they can't sign this deal.

There is unsure times ahead.

If the IFSC goes then houses become even cheaper. Great.

Biggins wrote: »

I am just tired of frigging Germany and France shoving stuff down the throats of the people in Europe.
Honestly, if Sarkosy or Merkel was stood in front of me, I wouldnt be my normal polite self.

Even if the idea is good.

44leto wrote: »

They would, but the reality of globalisation is banks can operate anywhere and they could move to a zone that does not impose this tax overnight.

The thing is that Europe can always say that retail banks need to have financial sectors here.

padd b1975

When is everyone going to realise that there are only 2 solutions to the euro crisis?
1. Let it fail and deal with whatever problems that will bring.
2. Print more money(issue euro bond) and deal with the high inflation that will bring.

Anything else that has been suggested simply has not worked.

getz

am i right in thinking that its wrong for other EU countries to have to pick up the tab to bail out the eurozones mismanagement of their eurozone club ?

44leto

Yahew wrote: »

presumably the idea is that the financial sector goes to America.

India, China anywhere with a phone line, it doesn't matter

If the IFSC goes then houses become even cheaper. Great.

its about 20000 jobs and well paying jobs contributing to our tax revenue and our economy, its a big sector

The thing is that Europe can always say that retail banks need to have financial sectors here.

The IFSC are not retail banks, they are corporate and investment banks, they don't deal with the public. Also this will be the nail in the coffin of our beleaguered retail banks, all they could do is increase charges and raise interest rates. In the end this is a charge on the consumer.

Yahew

No

Thats always the excuse when corporations are taxed. Might as well say that corporation tax is a tax on the consumer. It proves, by the way, there is a cartel. Tax is just a cost of business, if they can all pass it on, then there is no real competition.

doomed

No

A lot of the work banks do serves no purpose to either business or the personal customer. Financial products become an end in themselves and just something else to bet on and to generate earnings. If you had some form of transaction tax it might depress some of the lunacy.

Executive Steve

No

It's definitely a step in the right direction.

EU wide laws in the same spirit as the Glass-Steagall act would be a good move too (and America needs to follow suit there as well).

Nodin

No

Biggins wrote: »

I am just tired of frigging Germany and France shoving stuff down the throats of the people in Europe.
Honestly, if Sarkosy or Merkel was stood in front of me, I wouldnt be my normal polite self.

Yeah, I mean look at the malignant Bastards having the nerve to reign in big business.

laoch na mona

No

bout time the pay for their mess

44leto

Executive Steve wrote: »

It's definitely a step in the right direction.

EU wide laws in the same spirit as the Glass-Steagall act would be a good move too (and America needs to follow suit there as well).

Europe wide means nothing these days, I don't know if you have heard of the internet and globalisation. Banks will just up sticks and move to a country that does not impose this tax. Then the consumer will follow.

This act will just make New York, London, Shanghai more powerful and give them more control over our lives. Banking is to important a key industry, what Europe needs is more banks not less.

galwayrush

No

Will Bankers have their bonuses calculated before or after the tax?:rolleyes:

ejmaztec

padd b1975 wrote: »

Sorry to be pedantic, but by the law of averages the French lad would be stood beneath you, unless he had his platforms on.

This how Sarkozy travels with Angela these days

jesus_thats_gre

Dionysus wrote: »

Many of them are, surprisingly enough, back making massive profits. They're even declaring very good profits:

€942m third quarter profits at Deutsche Bank (25 Oct 2011)

€662m third quarter profit at Societe Generale (8 Nov 2011)

They are nothing profits for banks of that size in fairness.

Dionysus wrote: »

HSBC profits of $11.5bn in first 6 months of 2011 (1 Aug 2011)

This is a significant profit for a bank of that size though!

Princess Consuela Bananahammock

No

Biggins wrote: »

I am just tired of frigging Germany and France shoving stuff down the throats of the people in Europe.
Honestly, if Sarkosy or Merkel was stood in front of me, I wouldnt be my normal polite self.

Is this before or afte the hand over the bail out money?

mikom

Ikky Poo2 wrote: »

Is this before or afte the hand over the bail out money?

Not a gift.

Biggins

padd b1975 wrote: »

Sorry to be pedantic, but by the law of averages the French lad would be stood beneath you, unless he had his platforms on.

...Or climbed up his soap box again.

getz

Ikky Poo2 wrote: »

Is this before or afte the hand over the bail out money?

i have a lovely metal wall sign from the 1940s,with two bulldogs looking over the english channel, with the words on it,what we have we hold,its just as true today as it was then,

Biggins

Ikky Poo2 wrote: »

Is this before or afte the hand over the bail out money?

Before they turned up the pressure for heads in Dublin to take it!
The public hasn't seen the bail out money as far as I can see - only the banks has.
You know the ones that F&G (France & Germany) want to prop up so that any possible investment of their own, not goes down the tubes!

They don't give a rats arse about us, just their own arse in the end - lets not kids ourselves.
...But still, we are going to pay - with interest!

P.S.
Another 1.25 BILLION is going to the banks in January 25th.
Link

donadoni

No

Biggins wrote: »

Before they turned up the pressure for heads in Dublin to take it!
The public hasn't seen the bail out money as far as I can see - only the banks has.
You know the ones that F&G (France & Germany) want to prop up so that any possible investment of their own, not goes down the tubes!

They don't give a rats arse about us, just their own arse in the end - lets not kids ourselves.
...But still, we are going to pay - with interest!

P.S.
Another 1.25 BILLION is going to the banks in January 25th.
Link

Thats interesting. So all the bail out money is going to the banks.
I wonder where the money to pay nurses, doctors, fire fighters etc. is coming from right now?
Furthermore, have you looked at the central bank figures to see whos investment is really going down the drain if the banks are not propped up?
Have you ever wondered why Merkel was promoting bondholders to take a hit from the very start of this mess and why people like Timothy Geithner are strictly against it?

Nodin

No

getz wrote: »

i have a lovely metal wall sign from the 1940s,with two bulldogs looking over the english channel, with the words on it,what we have we hold,its just as true today as it was then,

For fucks sake....

Nodin

No

44leto wrote: »

Europe wide means nothing these days, I don't know if you have heard of the internet and globalisation. Banks will just up sticks and move to a country that does not impose this tax. Then the consumer will follow.

This act will just make New York, London, Shanghai more powerful and give them more control over our lives. Banking is to important a key industry, what Europe needs is more banks not less.

So they're going to avoid dealing with Europe entirely? I can see that working out allright.

Biggins

donadoni wrote: »

...Have you ever wondered why Merkel was promoting bondholders to take a hit from the very start of this mess and why people like Timothy Geithner are strictly against it?

Yes the BONDHOLDERS - not the banks!

O' and she did a u-turn on that anyway!

However, in a major climb-down, the German Chancellor said that the new bailout rules would not force losses on the bondholders that lend money to countries before they get into difficulty.

In June last year when the permanent bailout mechanism was created, Germany insisted on the clause to include losses for bondholders in any bailout from 2013.

This has now been dramatically withdrawn from the new deal to be announced on Friday.

Source: http://www.belfasttelegraph.co.uk/business/business-news/merkels-eu-treaty-reform-climbdown-over-bondholders-losses-16087227.html

I wonder where the money to pay nurses, doctors, fire fighters etc. is coming from right now?

I would say that you and I is coughing up the vast bulk of it.
More-so next year.

have you looked at the central bank figures to see whos investment is really going down the drain if the banks are not propped up?

I have and you know what, sometimes you have to try ones best doing your own thing and suffer the consequences.
Its not as if we are not suffering already! Financially and in numbers vacating the country this year alone (70,000+ SOURCE).

hatrickpatrick

I want to see banks pay directly for the mess they've made, not indirectly by adding taxes which affect PUNTERS' actions.

The simplest would be the following. Every cent of money given to banks as "bailouts" should in fact be treated as a loan and we should demand that the exchequer gets the lot of it back once the banks are in a position to repay it. We could even charge interest. Ireland is paying interest on its bailout loans, why the hell should banks not be treated exactly the same way?

Dionysus

No

Biggins wrote: »

I am just tired of frigging Germany and France shoving stuff down the throats of the people in Europe.
Honestly, if Sarkosy or Merkel was stood in front of me, I wouldnt be my normal polite self.

Unbelievable, Biggins. You should know way better than to see the words "Germany" or "France" and erupt into some British tabloid attack on the EU.

What, precisely, is your problem with this proposal, or is it simply the word 'Germany' which turned you against it?

I can't see anybody who believes in social justice, or justice per se, being against this. It's a hell of a lot better than tolerating their ridiculous profits, while increasing taxes for people far poorer.

Biggins

Dionysus wrote: »

Unbelievable, Biggins. You should know way better than to see the words "Germany" or "France" and erupt into some British tabloid attack on the EU.

I have nothing against the EU as such. Its a good idea if done right.
Its the bullying of two of its leaders I don't like. THATS ALL.
I'm sick and tired of their methods/antics!

44leto

There will be an exodus of European cash, this plan is as daft as the Euro.

Dionysus

No

Mike 1972 wrote: »

Id agree with it provided its not implemented on a "per transaction" basis which would only lead to it being passed onto customers in new/increased bank charges.


How exactly would this happen if it applied to all 27 EU states equally ? More bloody Daily Mail (or possibly Daily Telegraph -given who its proprieters are) inspired shyte I reckon.

I was sort of thinking the per transaction way would have a bit of a progressive nature about it; the more money you make, the more tax you pay. Either way, I'd expect they will pass on this tax no matter which way it's levied on them. It's not like HSBC with its $11.5 billion profits for the first six months of 2011 (!!!) is going to allow that profit to decline by not passing on this tax.

But the bothersome thing is that it needs unanimous agreement for it to be implemented across the EU, and Britain is out so, at the moment, it's looking like a Eurozone tax - which will make it unfair for Ireland. Everybody in the EU should take it, or nobody. Whatever happens, while I can see Britain's call for a global tax as having some merit, it's also a deliberately chimerical call. Britain is acting like a Fifth Column in the EU with this sort of thing; every other country agreed to it.

Dionysus

No

Biggins wrote: »

I have nothing against the EU as such. Its a good idea if done right.
Its the bullying of two of its leaders I don't like. THATS ALL.
I'm sick and tired of their methods/antics!

But is this idea a good idea?

Biggins

Dionysus wrote: »

But is this idea a good idea?

Apologies - but I'm unclear.
Is what a good idea?

Dionysus

No

Nodin wrote: »

Yeah, I mean look at the malignant Bastards having the nerve to reign in big business.

Nodin wrote: »

For fucks sake....

Well said, Nodin. I swore I wouldn't post on Boards again today and I ended up signing in twice more to thank each of these posts. You fecker!

Now, I can't get off it.

Dionysus

No

Biggins wrote: »

Apologies - but I'm unclear.
Is what a good idea?

The German "Robin Hood" tax of 57 billion, Biggins!

Biggins

Dionysus wrote: »

The German "Robin Hood" tax of 57 billion, Biggins!

Honestly - I don't know.
My first thought was that (if they can do it) they might eventually just pass it back down to all customers in some form for them to pay/cover.

Nodin

No

Biggins wrote: »

I have nothing against the EU as such. Its a good idea if done right.
Its the bullying of two of its leaders I don't like. THATS ALL.
I'm sick and tired of their methods/antics!

Compared to what I'd do, given the chance, they're the soul of tact and restraint.

Biggins

Nodin wrote: »

Compared to what I'd do, given the chance, they're the soul of tact and restraint.

:eek:

Robdude

People don't realize how global the economy is.

There are lots and lots of companies that come to Ireland because they can pay less in taxes here than in their home country. They aren't Irish, they don't have loyalty to Ireland. They are head-quartered in another country....and they aren't very loyal to that country either....since they setup another corporation and offices here to pay less in taxes.

Now, this is bad for the other countries - but it's good for Ireland. These companies bring a lot of money and a lot of jobs. They still pay a lot in taxes, and everyone they employee pays a lot in taxes.

It *sounds* good to say, 'Yeah - let's pass laws that add taxes!' but what's really going to happen? What special and unique advantages does Ireland offer an international company that it can't find somewhere else?

And how are Irish financial institutes going to be competitive against companies that don't have to deal with these additional taxes?

Let's say you were a hard-working, well educated, talented investment banker. You could work anywhere in the world - and make a LOT of money. Would you work in Ireland where the company that hires you can't pay you nearly as much as a company in the United States or Canada or Australia because the Irish company has to pay transaction taxes the others don't? And, hell, even without this tax, you're still looking at paying almost double the taxes here compared to many other places.

44leto

Robdude wrote: »

People don't realize how global the economy is.

There are lots and lots of companies that come to Ireland because they can pay less in taxes here than in their home country. They aren't Irish, they don't have loyalty to Ireland. They are head-quartered in another country....and they aren't very loyal to that country either....since they setup another corporation and offices here to pay less in taxes.

Now, this is bad for the other countries - but it's good for Ireland. These companies bring a lot of money and a lot of jobs. They still pay a lot in taxes, and everyone they employee pays a lot in taxes.

It *sounds* good to say, 'Yeah - let's pass laws that add taxes!' but what's really going to happen? What special and unique advantages does Ireland offer an international company that it can't find somewhere else?

And how are Irish financial institutes going to be competitive against companies that don't have to deal with these additional taxes?

Let's say you were a hard-working, well educated, talented investment banker. You could work anywhere in the world - and make a LOT of money. Would you work in Ireland where the company that hires you can't pay you nearly as much as a company in the United States or Canada or Australia because the Irish company has to pay transaction taxes the others don't? And, hell, even without this tax, you're still looking at paying almost double the taxes here compared to many other places.

Good post
It also has to be said, if you had a million or so to invest, would you put it to work in a country that does not incur this new cost.

This plan is daft and it will be bad for Europe in the long run.

Yahew

No

Robdude wrote: »

People don't realize how global the economy is.

There are lots and lots of companies that come to Ireland because they can pay less in taxes here than in their home country. They aren't Irish, they don't have loyalty to Ireland. They are head-quartered in another country....and they aren't very loyal to that country either....since they setup another corporation and offices here to pay less in taxes.

Now, this is bad for the other countries - but it's good for Ireland. These companies bring a lot of money and a lot of jobs. They still pay a lot in taxes, and everyone they employee pays a lot in taxes.

It *sounds* good to say, 'Yeah - let's pass laws that add taxes!' but what's really going to happen? What special and unique advantages does Ireland offer an international company that it can't find somewhere else?

And how are Irish financial institutes going to be competitive against companies that don't have to deal with these additional taxes?

Let's say you were a hard-working, well educated, talented investment banker. You could work anywhere in the world - and make a LOT of money. Would you work in Ireland where the company that hires you can't pay you nearly as much as a company in the United States or Canada or Australia because the Irish company has to pay transaction taxes the others don't? And, hell, even without this tax, you're still looking at paying almost double the taxes here compared to many other places.

This isn't an Irish tax. Its a European tax. And Europe has the clout to say - move out of our jurisdiction and we will penalise you on your retail operations.

I don't buy the Too Big To Tax arguments.

Yahew

No

44leto wrote: »

Good post
It also has to be said, if you had a million or so to invest, would you put it to work in a country that does not incur this new cost.

This plan is daft and it will be bad for Europe in the long run.

The cost is on financial transactions which seem to apply to normal punters anyway - i.e changing money costs money.

donadoni

No

Biggins wrote: »

Yes the BONDHOLDERS - not the banks!

O' and she did a u-turn on that anyway!

You were arguing, that Germany and France are only propping up the banks so that their investment doesn't go down the tubes. That doesn't go along with Merkels stance on private sector involvement.

Yes she did indeed have to take a U turn on it. Mainly because most other governments were against it, especially the nations in bail out territory. Unfortunately she had to compromize her view, so that there is a chance for such nations to borrow in the markets at a reasonable price in the foreseeable future.
I am just sick and tired of this nonsense that France and Germany are only bailing themselves out, as their banks were throwing crazy money into Ireland during the boom, when its pretty clear today, that it was mainly US and British institutions that did the reckless lending.

Biggins wrote: »

I would say that you and I is coughing up the vast bulk of it.
More-so next year.

I dont think you and I are coughing up enough then. Ireland is closed out of the markets at the moment and runs a huge deficit. The only other income than tax at present is the "bail out" money.

K-9

Biggins wrote: »

I would say that you and I is coughing up the vast bulk of it.
More-so next year.

Taxes don't even cover the Welfare and Public Service Pay bill, never mind everything else. When is the penny going to drop with people? Do you even think before you go on a rant?

What do you think the bulk of the IMF/EU bailout is for? Why do you think there's a deficit of €13/14 Billion next year?

Would it maybe because what you and everybody else pays isn't enough to keep the country running, never mind bank bailouts?

The vast bulk of it doesn't cut it, hence you and everybody else paying more taxes.

K-9

Robdude wrote: »

People don't realize how global the economy is.

There are lots and lots of companies that come to Ireland because they can pay less in taxes here than in their home country. They aren't Irish, they don't have loyalty to Ireland. They are head-quartered in another country....and they aren't very loyal to that country either....since they setup another corporation and offices here to pay less in taxes.

Now, this is bad for the other countries - but it's good for Ireland. These companies bring a lot of money and a lot of jobs. They still pay a lot in taxes, and everyone they employee pays a lot in taxes.

It *sounds* good to say, 'Yeah - let's pass laws that add taxes!' but what's really going to happen? What special and unique advantages does Ireland offer an international company that it can't find somewhere else?

And how are Irish financial institutes going to be competitive against companies that don't have to deal with these additional taxes?

Let's say you were a hard-working, well educated, talented investment banker. You could work anywhere in the world - and make a LOT of money. Would you work in Ireland where the company that hires you can't pay you nearly as much as a company in the United States or Canada or Australia because the Irish company has to pay transaction taxes the others don't? And, hell, even without this tax, you're still looking at paying almost double the taxes here compared to many other places.

The IFSC's rate of tax was raised previously. Made no difference, indeed it expanded to the extent it is today. Its a scare tactic pure and simple.

What Ireland will do is keep its lax tax rules and regulation, making the tax irrelevant.

Going by the logic on this thread, increasing tax actually made the IFSC bigger!

Fratton Fred

So its the banks fault that the Greeks want to retire at 35 on a state pension and never pay any tax?

I'm all for corporations paying a decent amount of tax, rather than pick on the banks, maybe a common corporation tax across europe should be implemented.