Bloomberg News

Austria Clings to Transaction Tax as Germany Sees No Agreement

March 27, 2012

Austria is sticking to plans for a financial-transaction tax in Europe to help consolidate its budget, even as Germany’s finance minister sees little chance of a European Union agreement on the levy.

Countries that back the tax can and should introduce it to raise funds and funnel investments away from speculative products and into the “real economy,” Vice Chancellor Michael Spindelegger told journalists after the weekly government meeting in Vienna today. Chancellor Werner Faymann reiterated his plan to start a EU-wide referendum on the plan.

“Just because others are getting cold feet doesn’t mean we should let go as well,” Spindelegger said when asked about German Finance Minister Wolfgang Schaeuble’s comment yesterday that the tax won’t be introduced in the euro area.

Austria, where both government and opposition support the levy, plans to reduce its deficit by 26.5 billion euros ($35.4 billion) in the five years to 2016, and has budgeted the financial-transaction tax to contribute 500 million euros annually from 2014. It also relies on more than 1 billion euros coming from an accord with Switzerland under which wealthy Austrians’ funds on Swiss accounts would be taxed.

To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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