German Finance Minister Wolfgang Schäuble reiterated, on 1 September, his support for the introduction of a tax on financial transactions, at least in Europe, in spite of the European Commission’s hesitations. Schäuble admitted that the chances of working out a global solution, which ideally he would back, were “relatively slim” but that “we are going to make every effort to establish such a tax in Europe”. Paris and Berlin have been pressing for a financial transaction tax for months. “We could establish it in the eurozone,” he suggested.

The Commission is not completely behind the idea due to concerns about “considerable unwanted effects” and possibilities of circumventing the measure due to the complexity of financial products and transactions (see related article).

If such a tax is not introduced, “we will have a problem for the 2012 budget,” continued Schäuble. Germany’s budget projections to 2014 count on two billion euro in annual revenues as from 2012 under such a tax. This is of course provided Germany does not go it alone, he explained.

The idea of taxing financial transactions, known for years as the Tobin tax, was brought back in the spotlight by the financial crisis.