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The struggle over the Financial Transactions Tax. A politico-economic farce

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  • Stephan Schulmeister

Abstract

The struggle over the FTT has developed in three phases. In the first phase (2009 to 2011) the supporters of the tax went on the offensive, supported by the ?shock effects? of the financial crisis. This phase ended with the (preliminary) ?victory? in the form of the FTT proposal of the European Commission (EC) in September 2011. The second phase was shaped by the search for ways how to implement the FTT within the EU. It ended with the publication of a modified FTT proposal by the EC in February 2013 as basis for the implementation in 11 Member States. The last phase has been marked by a strong counter-offensive of the financial lobby which succeeded in playing off FTT supporting countries against each other, in particular Germany and France. This phase ended with a defeat of the FTT supporters. Not even in a group of EU Member States will a general FTT be implemented in the foreseeable future. The struggle over the FTT was mainly carried out in two ?battlefields?, the intellectual disputes between economists at universities, research institutes and international organizations, and the political controversies between NGOs, political parties, governments and pressure groups, in particular the finance industry.

Suggested Citation

  • Stephan Schulmeister, 2015. "The struggle over the Financial Transactions Tax. A politico-economic farce," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(5), pages 15-55.
  • Handle: RePEc:cai:reofsp:reof_141_0015
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    References listed on IDEAS

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    1. Peter Hördahl & Michael R King, 2008. "Developments in repo markets during the financial turmoil," BIS Quarterly Review, Bank for International Settlements, December.
    2. Schulmeister, Stephan, 2006. "The interaction between technical currency trading and exchange rate fluctuations," Finance Research Letters, Elsevier, vol. 3(3), pages 212-233, September.
    3. repec:wfo:wstudy:31819 is not listed on IDEAS
    4. European Commission, 2010. "Innovative Financing at a Global Level," Taxation Papers 23, Directorate General Taxation and Customs Union, European Commission.
    5. Gorton, Gary & Metrick, Andrew, 2012. "Securitized banking and the run on repo," Journal of Financial Economics, Elsevier, vol. 104(3), pages 425-451.
    6. Robert Pollin & Dean Baker & Marc Schaberg, 2003. "Securities Transaction Taxes for U.S. Financial Markets," Eastern Economic Journal, Eastern Economic Association, vol. 29(4), pages 527-558, Fall.
    7. European Commission, 2010. "Financial Sector Taxation," Taxation Papers 25, Directorate General Taxation and Customs Union, European Commission.
    8. Stephan Schulmeister, 2010. "Boom-Bust Cycles and Trading Practices in Asset Markets, the Real Economy and the Effects of a Financial Transactions Tax," WIFO Working Papers 364, WIFO.
    9. Stephan Schulmeister, 2008. "Profitability of Technical Currency Speculation. The Case of Yen-Dollar Trading 1976-2007," WIFO Working Papers 325, WIFO.
    10. Stephan Schulmeister, 2008. "Components of the profitability of technical currency trading," Applied Financial Economics, Taylor & Francis Journals, vol. 18(11), pages 917-930.
    11. Stephan Schulmeister, 2007. "Aggregate Trading Behavior of Technical Models and the Yen/Dollar Exchange Rate," WIFO Working Papers 294, WIFO.
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    Citations

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    Cited by:

    1. Capelle-Blancard, Gunther, 2016. "The abrogation of the “Impôt sur les opérations de bourse” did not foster the French stock market," Finance Research Letters, Elsevier, vol. 17(C), pages 257-266.
    2. Sarah Godar & Christoph Paetz & Achim Truger, 2015. "The scope for progressive tax reform in the OECD countries. A macroeconomic perspective with a case study for Germany," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(5), pages 79-117.
    3. Stephan Schulmeister, 2014. "The Great Depression, the New Deal, their Evaluation by Mainstream Economists and the Present Crisis of Europe," WIFO Working Papers 483, WIFO.
    4. Roman Šperka & Irena Szarowská, 2015. "Impact of a Financial Transaction Tax on a Financial Market," Working Papers 0013, Silesian University, School of Business Administration.
    5. Stephan Schulmeister, 2014. "Learning from Roosevelt: His "New Deal" and the Present Crisis of Europe," WIFO Working Papers 473, WIFO.

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