Taking on the Speculators: What Would a European Tobin Tax Really Mean?
Angela Merkel and Nicolas Sarkozy are pressing forward with plans to introduce a financial transaction tax in the EU -- if necessary without Britain, home to Europe's largest financial center. Critics believe it will cause an exodus of the industry from the euro zone. But a closer look at the proposal suggests the worst wouldn't necessarily come true.
The German banking capital Frankfurt: Life could soon get more expensive for the financial industry in Europe.
The idea is age-old, but its time may soon be coming. A tax on financial transactions could help to stem short-term speculation on the markets. French President Nicolas Sarkozy wants to push the tax through in Europe -- if necessary even without Britian, which has doggedly resisted such measures. Sarkozy picked up a new ally for the plan this week as well: German Chancellor Angela Merkel is also willing to venture going it alone to implement the tax exclusively within the 17 members of the euro zone. It would not directly apply to London, Europe's most important financial center.
In the meantime, the idea has also picked up some prominent advocates, including the American Nobel Prize-winning economist Joseph Stiglitz. Last year, Stiglitz told the Frankfurter Allgemeine Sonntagszeitung newspaper: "I am convinced that if Germany, France, Spain and Italy were to implement the financial transaction tax together, it would work."
But what would the tax look like? What are the objectives behind it? And what are the downsides? SPIEGEL ONLINE answers the most pressing questions.
- Part 1: What Would a European Tobin Tax Really Mean?
- Part 2: How Would the Tax Work?
- Part 3: What Is the Tax Meant to Achieve?
- Part 4: Can the Plan Work without Great Britain?
- Part 5: Do Any Countries Have Experience with Similar Laws?
- Part 6: What Disadvantages Would the Tax Have?
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