Van Cleynenbreugel, Pieter; Devroe, Wouter --- "The financial transaction tax project" [2017] ELECD 398; in De Witte, Bruno; Ott, Andrea; Vos, Ellen (eds), "Between Flexibility and Disintegration" (Edward Elgar Publishing, 2017) 282

Book Title: Between Flexibility and Disintegration

Editor(s): De Witte, Bruno; Ott, Andrea; Vos, Ellen

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781783475889

Section: Chapter 11

Section Title: The financial transaction tax project

Author(s): Van Cleynenbreugel, Pieter; Devroe, Wouter

Number of pages: 22

Abstract/Description:

In the aftermath of the financial crisis, states and international organisations have actively been looking for new ways to ensure that the financial sector effectively contributes to the rebuilding of a scattered economy. One of the most popular proposals voiced in that regard comprises the introduction of a tax on (speculative) transactions in financial instruments engaged in by financial institutions. This financial transaction tax would require every financial institution to pay a levy amounting to a small percentage of the value underlying those transactions. This chapter analyses the European Union’s proposal for a Directive establishing a common financial transaction tax (FTT). The proposal is controversial in its own right, as it relies on extended establishment criteria to determine who should pay the envisaged tax. In addition, the proposal emerges from an enhanced cooperation initiative by only 11 Member States willing to implement a common taxation scheme. The regulatory developments concerning the enhanced cooperation FTT mechanism, as outlined in section 2, point to the emergence of a ‘fast-track’ European integration scheme that complements other schemes of differentiated and flexible integration mechanisms pervading post-crisis EU law and governance. In section 3, it will be submitted that such a fast-track project directly affects the role and scope of fiscal diversity and regulatory competition as central values underlying the European integration project in general and the EU internal market in particular. At the same time, however, EU law does not seem to exclude the adoption of this and similar fast-track integration projects.