There are 11 European Union countries currently discussing the possibilities of implementing a .1% tax on all bonds and shares traded. The main goal of this tax would be “to curb risky, speculative trades and perhaps even create a fund that could be used to help banks in trouble”. The tax revenue would then be used as a safety net for the banks within the participating nations. Some analysts are weary of this tax due to it’s potential implications on the already struggling EU economy.
A tax could further slow European trading and potentially have the opposite effect than originally intended. The key supporters of the tax are France and Germany, whereas the Netherlands and Britain have expressed concerns about the plan. The tax would lead to more unified European banks with similar regulations. The countries involved are proposing a shift from lending to each country, to lending to the banks themselves.
I feel as though a .01% tax is so inconsequential, even in large trades, it would have a positive effect on the EU. It would add the illusion of security, which is ultimately what investors are looking for in Europe at the moment.
Don Melvin, Sarah Dilorenzo 09/10/12, “EU Fin Mins Tackle Thorny Issue of Banking Union” . http://www.canadianbusiness.com/article/101556–eu-finance-ministers-tackle-difficult-issues-of-banking-union-financial-transaction-tax