PES President, Sergei Stanishev stated that; “This tax compels the Financial Sector to at last make a tangible contribution to the real economy”. However Mr. Stanishev noted that the level and application of the tax was smaller and narrower than had been hoped. He urged the sector to clearly acknowledge that; “millions of ordinary people judge financial and economic success by what they can see and touch – the creation of new jobs, new start ups and new opportunities. This is what economic growth means. Those people rightly blame the financial sector for the economic woes of the last 5 years. Today with this financial transaction tax, that sector has made a first step in repairing the damage and rebuilding the trust, but this step must be the first of many”.

Mr. Stanishev noted that; “In 2009 Conservative Politicians mocked the PES for even suggesting that a Financial Transaction Tax was possible. This is thanks to the resolve and perseverance of the Party of European Socialists and its member parties. It is now up to the Member States to negotiate the updated proposal so that the eleven Member States that have agreed to implement the tax can finally do so. We call on the Member States to act swiftly so that the implementation of the FTT can finally become a reality.

The directive, which will cover 11 eurozone countries, includes the ‘issuance principle’ in the scope of the Directive, which increases the impact of the tax. The principle means that financial instruments in the 11 Member States will be taxed when traded, even if they are traded on countries that have not agreed on the FTT. The advantage of this is that it neutralises the possibility of relocation of financial services, a scare tactic long used by the industry. As it is combined with the already agreed ‘residence principle’: this means that the tax applies to any transaction of a financial institution of participating Member States even if the institution is based a non-participating Member State. So the tax would still apply for a German bank in Switzerland makes a transaction– because the bank is under German so therefore FTT jurisdiction.
The eleven Member States are: France, Germany, Belgium, Austria, Slovenia, Portugal, Greece, Slovakia, Italy, Spain, Estonia.