Green party criticises government opposition to FTT

Green MEP Claude Turmes
Green MEP Claude Turmes
Photo: Manuel Dias

(CS) Luxembourg's Green party Déi Gréng has criticised Luxembourg's opposition to a financial transaction tax (FTT), saying that the Grand Duchy was isolating itself on this issue.

Earlier this week, 11 EU member states handed in a proposal for a FTT with the Commission, which could move forward to the European Parliament.

Luxembourg's Greens argued in a statement that the tax would limit financial market speculation and generate much needed tax revenue.

MEP Claude Turmes added that the FTT was a “socially just contribution” to better regulate markets. “I regret that Luxembourg is not part of this important tax policy initiative. It is urgently needed to solve this crisis socially and sustainably,” he said, criticising that Luxembourg was boycotting the move and isolating itself.

Luxembourg position a "dead end"

Parliamentary group head François Bausch meanwhile declared that the Luxembourg's financial centre could only survive if the government was open to regulation and modernisation.

He criticised that Prime Minister Jean-Claude Juncker had changed his opinion from being an “ardent supporter” to becoming an opponent of the tax. Bausch added that the government was on the wrong path, stressing savings measures rather than looking at new ways to generate revenue.

“This course will lead to recession and is a dead end,” he concluded.

Don't bite the hand that feeds you

The Luxembourg government, including Finance Minister Luc Frieden, has repeatedly spoken out against the tax.

Frieden identified several problems with previous tax proposals, including the lack of precision in regards to how the money should be raised and what it should be spent on.

He also warned last year that the FTT was not a way to solve the financial crisis.

The minister has previously voiced concern that the Luxembourg financial centre would suffer from such a tax, unless it was implemented across all EU member states or even around the world.

With the financial services industry highly mobile, he warned that companies would withdraw from Luxembourg to a more favourable business climate, warning that Luxembourg should not bite the hand that feeds it, with around 40 percent of tax revenue generated through the financial services industry.