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EUROPEAN UNION

Germany breaks finance tax deadlock

Europe's finance ministers crawled towards a compromise on a disputed financial transactions tax Saturday, after a German plan to break a months-long deadlock on the issue won cautious support.

Published: 31 March 2012 14:50 CEST
Germany breaks finance tax deadlock
Photo: DPA

Ministers effectively agreed to park a European Commission proposal for a wide-ranging EU-wide levy on the financial sector and consider Berlin’s plan to tax trades on company stocks and shares.

In a letter to his colleagues, German Finance Minister Wolfgang Schäuble acknowledged that his wish to see a wide-ranging tax introduced was unlikely in the face of British opposition and instead proposed “an intermediate step.”

“This would entail a tax payable on all transactions involving shares of corporations listed on a stock exchange, with the tax levied according to the place where the corporation has its registered office,” said Schäuble.

Such a move would be based on a tax already in force in Britain – stamp duty – added the Berlin proposal, making it harder for London to block.

The suggestion won broad approval, with French Finance Minister Francois Baroin deeming it “wise” and stressing that “we have to move forward on this issue.”

The finance minister of Sweden, which along with Britain, has been sceptical over a broad financial transaction tax, also showed a willingness to compromise.

“We have some differences of opinion,” admitted Anders Borg as he briefed reporters after the meeting. “We will try to work constructively to find something that is common ground for the whole of the EU.”

He stressed that the Commission’s proposal, which seeks to tax not only trading in company shares but also complex financial instruments like derivatives, should be taken off the table.

“It’s problematic for the recovery, for households and for corporates,” said Borg.

Danish Finance Minister Margrethe Vestager, who hosted the meeting as Denmark holds the rotating EU presidency, said ministers would focus “primarily on alternatives, because that’s where you find the most constructive atmosphere.”

Speaking to reporters after the meeting, Schäuble said that experts would come together to thrash out the remaining issues. “We made good progress,” he said.

“We agreed that if we maybe don’t reach the perfect solution of a broad financial transaction tax at a European level, because we need a unanimous decision for that, we should … intensively look at a working group,” he added.

“It is an important step in the right direction.”

The tax aims to make the financial services industry pay its way in the future after banks especially benefited heavily from taxpayer bailouts when the mortgage meltdown in the United States sparked the 2008 global financial crisis.

The Commission’s proposal from September has been strongly supported by nine countries, including European power couple France and Germany.

But Britain, home to 80 percent of Europe’s finance industry, has warned that it would prompt investors to flee the 27-nation bloc.

Despite the opposition, Baroin stressed the “determination” of the nine countries backing the introduction of a broader tax, describing it as “an essential political project for us.”

The German proposal insisted: “Negotiations on the Commission’s proposal for a common system of financial transactions tax (FTT) should not be abandoned or postponed.”

“I have not given up on the FTT,” stressed Schäuble.

AFP/hc

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BREXIT

OPINION: Pre-Brexit Brits in Europe should be given EU long-term residency

The EU has drawn up plans to make it easier for non-EU citizens to gain longterm EU residency so they can move more easily around the bloc, but Italy-based citizens' rights campaigner Clarissa Killwick says Brits who moved to the EU before Brexit are already losing out.

Published: 8 December 2023 14:34 CET
OPINION: Pre-Brexit Brits in Europe should be given EU long-term residency

With all the talk about the EU long-term residency permit and the proposed improvements there is no mention that UK citizens who are Withdrawal Agreement “beneficiaries” are currently being left out in the cold.

The European Commission has stated that we can hold multiple statuses including the EU long-term permit (Under a little-known EU law, third-country nationals can in theory acquire EU-wide long-term resident status if they have lived ‘legally’ in an EU country for at least five years) but in reality it is just not happening.

This effectively leaves Brits locked into their host countries while other third country nationals can enjoy some mobility rights. As yet, in Italy, it is literally a question of the computer saying no if someone tries to apply.

The lack of access to the EU long-term permit to pre-Brexit Brits is an EU-wide issue and has been flagged up to the European Commission but progress is very slow.

READ ALSO: EU government settle on rules for how non-EU citizens could move around Europe

My guess is that few UK nationals who already have permanent residency status under the Withdrawal Agreement are even aware of the extra mobility rights they could have with the EU long-term residency permit – or do not even realise they are two different things.

Perhaps there won’t be very large numbers clamouring for it but it is nothing short of discrimination not to make it accessible to British people who’ve built their lives in the EU.

They may have lost their status as EU citizens but nothing has changed concerning the contributions they make, both economically and socially.

An example of how Withdrawal Agreement Brits in Italy are losing out

My son, who has lived almost his whole life here, wanted to study in the Netherlands to improve his employment prospects.

Dutch universities grant home fees rather than international fees to holders of an EU long-term permit. The difference in fees for a Master’s, for example, is an eye-watering €18,000. He went through the application process, collecting the requisite documents, making the payments and waited many months for an appointment at the “questura”, (local immigration office).

On the day, it took some persuading before they agreed he should be able to apply but then the whole thing was stymied because the national computer system would not accept a UK national. I am in no doubt, incidentally, that had he been successful he would have had to hand in his WA  “carta di soggiorno”.

This was back in February 2022 and nothing has budged since then. In the meantime, it is a question of pay up or give up for any students in the same boat as my son. There is, in fact, a very high take up of the EU long-term permit in Italy so my son’s non-EU contemporaries do not face this barrier.

Long-term permit: The EU’s plan to make freedom of movement easier for non- EU nationals 

Completing his studies was stalled by a year until finally his Italian citizenship came through after waiting over 5 years.  I also meet working adults in Italy with the EU long-term permit who use it for work purposes, such as in Belgium and Germany, and for family reunification.  

Withdrawal agreement card should double up as EU long-term residency permit

A statement that Withdrawal Agreement beneficiaries should be able to hold multiple statuses is not that easy to find. You have to scroll quite far down the page on the European Commission’s website to find a link to an explanatory document. It has been languishing there since March 2022 but so far not proved very useful.

It has been pointed out to the Commission that the document needs to be multilingual not just in English and “branded” as an official communication from the Commission so it can be used as a stand-alone. But having an official document you can wave at the immigration authorities is going to get you nowhere if Member State governments haven’t acknowledged that WA beneficiaries can hold multiple statuses and issue clear guidance and make sure systems are modified accordingly.

I can appreciate this is no mean feat in countries where they do not usually allow multiple statuses or, even if they do, issue more than one residency card. Of course, other statuses we should be able to hold are not confined to EU long-term residency, they should include the EU Blue Card, dual nationality, family member of an EU citizen…

Personally, I do think people should be up in arms about this. The UK and EU negotiated an agreement which not only removed our freedom of movement as EU citizens, it also failed to automatically give us equal mobility rights to other third country nationals. We are now neither one thing nor the other.

It would seem the only favour the Withdrawal Agreement did us was we didn’t have to go out and come back in again! Brits who follow us, fortunate enough to get a visa, may well pip us at the post being able to apply for EU long-term residency as clearly defined non-EU citizens.

I have been bringing this issue to the attention of the embassy in Rome, FCDO and the European Commission for three years now. I hope we will see some movement soon.

Finally, there should be no dragging of heels assuming we will all take citizenship of our host countries. Actually, we shouldn’t have to, my son was fortunate, even though it took a long time. Others may not meet the requirements or wish to give up their UK citizenship in countries which do not permit dual nationality.  

Bureaucratic challenges may seem almost insurmountable but why not simply allow our Withdrawal Agreement permanent card to double up as the EU long-term residency permit.

Clarissa Killwick,

Since 2016, Clarissa has been a citizens’ rights campaigner and advocate with the pan-European group, Brexpats – Hear Our Voice.
She is co-founder and co-admin of the FB group in Italy, Beyond Brexit – UK citizens in Italy.

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