Hostname: page-component-848d4c4894-5nwft Total loading time: 0 Render date: 2024-06-07T07:05:28.160Z Has data issue: false hasContentIssue false
  • English
  • Français

The European Union as a Global Actor: The Case of the Financial Transaction Tax

Published online by Cambridge University Press:  25 July 2018

Marina Strezhneva
Marina Strezhneva*
Affiliation:
IMEMO – 23, Profsoyuznaya Str., Moscow, 117997, Russian Federation. Email: m.strezhneva@imemo.ru
Get access Rights & Permissions [Opens in a new window]

Abstract

The EU plays a high-profile role in the international arena, and yet this role still evades accurate conceptualization. Since the EU is not a state, it is commonly accepted as sui generis; a normative power influencing the world order mostly by means of direct and intermediary persuasion. Despite this position, in practice when championing the global normative agenda, the EU does not always demonstrate high efficiency as a leader. This article studies the EU’s efforts to push through regional and global versions of a financial transaction tax, meant to promote the common good through the positive externalities it generates for the economy. The aim of the article is to arrive at an adequate explanation for the (in)ability of the EU to act as an agent of global governance in this case. The focus of attention is the inner organizational limitations on the EU’s behaviour as a global actor.

Type
Articles
Information
European Review , Volume 26 , Issue 4 , October 2018 , pp. 704 - 720
Copyright
© Academia Europaea 2018 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

References and Notes

1. Van Vooren, B. (2011) The EU as a global Robin Hood: proposal for a multilateral convention on a global financial transaction tax. CLEER Working Papers 4, pp. 1–30. Available at: www.asser.nl/media/1627/cleer2011-4web.pdf (accessed 20 February 2016).Google Scholar
2. Van Vooren, B. (2012) The global reach of the proposed EU financial transaction tax directive: creating momentum through internal legislation. EUI RSCAS Working Papers 28, pp. 1–23. Available at: http://cadmus.eui.eu/bitstream/handle/1814/22559/RSCAS_2012_28.pdf?sequence=1&isAllowed=y (accessed 20 February 2016).Google Scholar
3. Van Vooren, B. (2013) The proposed financial transaction tax directive: the quest to create momentum at the G20 through internal legislation. In B. Van Vooren, S. Blockmans and J. Wouters (Eds), The EU’s Role in Global Governance: The Legal Dimension (Oxford: Oxford University Press), pp. 272–286.Google Scholar
4. Van Vooren, B. (2014) The EU’s financial transaction tax: shaping global financial governance in its own image. In D. Kochenov and F. Amtenbrink (Eds), The European Union’s Shaping of the International Legal Order (Cambridge: Cambridge University Press), pp. 328–348.Google Scholar
5. Wollner, G. (2014) Justice in finance: the normative case for an international transaction tax. The Journal of Political Philosophy, 22(4), pp. 458–485.Google Scholar
6. Grahl, J. and Lysandrou, P. (2014) The European Commission’s proposal for a financial transaction tax: a critical assessment. Journal of Common Market Studies, 52(2), pp. 234–249.Google Scholar
7. Nerudová, D. and Dvořáková, V. (2014) Financial transaction tax: can it be sufficient resource of EU budget when introduced through enhanced cooperation? Procedia Economics and Finance, 12, pp. 453–462 Available at: www.sciencedirect.com/science/article/pii/S2212567114003670 (accessed 20 February 2016).Google Scholar
8.In particular, in many jurisdictions, no value added tax (VAT) was imposed on financial transactions, distinguishing them from many other services that did have to pay VAT.Google Scholar
9.Unilateral financial transaction taxes were at that time introduced in EU countries, such as Austria, Greece, Luxembourg, Poland, Portugal, Spain and the UK.Google Scholar
10.Tax legislation is mainly decided by each country in the EU at the national level. The European Commission can present proposals for tax legislation where it considers EU-wide action is needed for the Internal Market to work properly.Google Scholar
11. European Parliament (2012) Crisis and Economic Governance V. Eurobarometer (EB77.2) Summary. Brussels, 21 May, p. 6. Available at: www.europarl.europa.eu/pdf/eurobarometre/2012/crise_V/eb_77_2_crisis_and_economic_governance_V_en.pdf (accessed 20 February 2016).Google Scholar
12. European Commission (2010) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 7 October – Taxation of the Financial Sector. Available at: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=URISERV:mi0063 (accessed 20 February 2016).Google Scholar
13. A tax (proposed by the International Monetary Fund), raised on the sum total of a bank’s profits and the remuneration packages of bankers.Google Scholar
14.It led to financial institutions relocating to surrounding countries. The spectacular failure of the Swedish experience with a ‘unilateral’ FTT is nowadays attributed mainly to its poor design. The tax rates were very high. The taxation mechanism was easy to evade. While government bills and bonds and some associated derivatives were made subject to taxation, substitutes such as debentures, variable-rate notes, forward rate agreements and swaps were not. For the EU, the Commission subsequently advocated lower rates and a very wide scope, with all financial transactions covered, see G. Färm (2014) Forget Sweden, FTT should fly. In: G. Färm, www.socialdemokraterna.se/Webben-for-alla/EU/EU/Modulerny/EU/Ledamoterna-/Goran-Farm1/Mediany/Artiklar/Forget-Sweden-FTT-should-fly/ (accessed 20 February 2016).Google Scholar
15. European Commission (2011) Proposal for a Council Directive on a common system of financial transaction tax and amending Directive 2008/7/EC. Brussels, 28 September. Available at: http://ec.europa.eu/taxation_customs/resources/documents/taxation/other_taxes/financial_sector/com%282011%29594_en.pdf (accessed 20 February 2016).Google Scholar
16.There is a requirement of unanimous decision-making in the Council in the field of taxation.Google Scholar
17. Van Rompuy, H. (2012) Towards a genuine economic and monetary union, 5 December. Available at: www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/134069.pdf (accessed 20 February 2016).Google Scholar
18. EurActiv.com (2013) FTT deal ignites debate on how to allocate funds, 22 January. Available at: http://beta.euractiv.com/sections/euro-finance/news/ftt-deal-ignites-debate-on-how-to-allocate-funds/ (accessed 24 February 2016).Google Scholar
19. J.-C. Juncker in close cooperation with D. Tusk, J. Dijsselbloem, M. Draghi and M. Schulz (2015) The Five Presidents’ Report. Completing Europe’s Economic and Monetary Union. Available at: http://ec.europa.eu/priorities/sites/beta-political/files/5-presidents-report_en.pdf (accessed 24 February 2016).Google Scholar
20.Participating member states (PMS) were: Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain.Google Scholar
21.Greece was one of the PMS, but did not sign the statement, given the recent national elections (much like the absence of Slovenia from the joint statement, issued in May 2014).Google Scholar
22. Algirdas, Š. (2013) Speech: Speaking points on Financial Transaction tax. ECOFIN Press Conference. Brussels, 22 January. Available at: http://europa.eu/rapid/press-release_SPEECH-13-42_fr.htm (accessed 24 February 2016).Google Scholar
23. www.leadinggroup.org/IMG/pdf/A_key_tax_to_address_global_challenges.pdf (14 March 2016).Google Scholar
24. European Parliament (2015) The European Union’s Role in International Economic Fora. Paper 1: the G20. April 2015, p. 9. Available at: www.europarl.europa.eu/RegData/etudes/STUD/2015/542207/IPOL_STU(2015)542207_EN.pdf (accessed 24 February 2016).Google Scholar
25. Financial Times (2009) Steinbrück seeks global tax. Financial Times, 11 September. Available at: www.ft.com/intl/cms/s/0/4038e1fe-9f09-11de-8013-00144feabdc0.html#axzz42ERffy8F (accessed 7 March 2016).Google Scholar
26. United Nations (2002) Report of the International Conference on Financing for Development. Monterrey, Mexico, 18–22 March. Available at: www.ipu.org/splz-e/ffd08/monterrey.pdf (accessed 24 February 2016).Google Scholar
27. Belgium, Benin, Brazil, Burkina Faso, Congo, Ethiopia, France, Guinea, Japan, Mali, Mauritania, Norway, Senegal, Spain and Togo.Google Scholar
28. Gates, B. (2011) Innovation with Impact: Financing 21st Century Development. A Report to G20 Leaders. Cannes Summit, November. Available at: www.leadinggroup.org/IMG/pdf/BillGatesg20-report-english-2.pdf (accessed 24 February).Google Scholar
29. Amtenbrink, F. and Repasi, R. (2015) The Role of the EU in the G20. Introductory Statement. Hearing of the Committee for Economic and Monetary Affairs of the European Parliament (ECON) on ‘The role of the European Union in international economic fora European Research Centre for Economic and Financial Governance, 17 July. Available at: www.esl.eur.nl/fileadmin/ASSETS/frg/Nieuws/Actual/2015-07-20_Introductory_statement.pdf (accessed 24 February).Google Scholar
30. Ghosh, J. (2011) Summit? What Summit? D+DC: Development and Cooperation, 16 November. Available at: www.dandc.eu/en/article/g20-language-does-not-paper-over-disagreement (accessed 24 February 2016).Google Scholar
31. Зыкова, Татьяна (2011) От налога не уйти: Аркадий Дворкович предлагает на 20% увеличить их собираемость. Российская газета, 11.10.2011 [Zyikova, Tat’jana (2011) Ot naloga ne uyti: Arkadiy Dvorkovich predlagaet na 20% uvelichit ih sobiraemost [There is no way to avoid the tax: Arkadiy Dvorkovich proposes to raise the tax collection rate by 20%]]. Rossiyskaya gazeta, 11 October. Available at: www.rg.ru/2011/10/11/dvorkovich.html (accessed 24 February 2016).Google Scholar
32. Глазьев, Ceргей (2014) Вывоз капитала за рубеж надо обложить налогом’, RUPOSTERS, 22 сентября [Glaz’ev Sergej (2014) Vyvoz kapitala za rubezh nado oblozhit’ nalogom [External capital movement has to be taxed]]. RUPOSTERS, 22 September. Available at: https://ruposters.ru/news/22-09-2014/sergej-glazjev-vyvoz-kapitala-za-rubezh-nado-oblozhit-nalogom (accessed 24 February 2016).Google Scholar
33. Picek, O. (2008) A general financial transaction tax: financing development and enhancing financial stability. Paper presented at the Meeting of the UN Economic and Social Council in New York on April 2008. Available at: www.un.org/esa/ffd/ecosoc/springmeetings/2008/Schulmeister_presentation.pdf (accessed 20 February 2016).Google Scholar
34.Several Congressional proposals for FTTs have been introduced by Representative Peter DeFazio and Senator Tom Harkin, and by Representative Keith Ellison, all of them from the Democratic Party, and also by Democratic presidential candidate Bernie Sanders (L.E. Burman, W.G. Gale, S. Gault, B. Kim, J. Nunns and S. Rosenthal (2015) Financial Transaction Taxes in Theory and Practice, Discussion Draft, 31 July, p. 2). On 12 January 2015, the Democratic leadership in the US House of Representatives announced support for FTT as a core element of a new tax reform plan. (L.E. Burman, W.G. Gale, S. Gault, B. Kim, J. Nunns and S. Rosenthal (2015) Financial Transaction Taxes in Theory and Practice, Discussion Draft, 31 July. Available at: www.taxpolicycenter.org/UploadedPDF/2000287-Financial-Transaction-Taxes-in-Theory-and-Practice.pdf (accessed 24 February)).Google Scholar
35. Manners, I. (2000) Normative Power Europe: A Contradiction in Terms? Working Paper No. 38 (Copenhagen: Copenhagen Peace Research Institute), p. 44.Google Scholar
36. Moravcsik, A. (1997) Taking preferences seriously: a liberal theory of international politics. International Organization, 51(4), p. 526.Google Scholar
37. Putnam, R.D. (1988) Diplomacy and domestic politics: the logic of two-level games. International Organisation, 42(3), p. 36.Google Scholar
38. European Council (2010) Conclusions, Brussels, 17 June 2010, p. 7. Available at: http://ec.europa.eu/eu2020/pdf/council_conclusion_17_june_en.pdf (accessed 20 February 2016).Google Scholar
39.The multilevel governance model (L. Hooghe and G. Marks (2001) Multi-level Governance and European integration (Oxford: Rowman and Littlefield)) provided a first attempt at capturing more accurately interactions between European institutions and national governments as actors at different governance levels. Michael Zürn applied it to the study of global governance, see M. Zürn (2010) Global governance as multi-level governance. In H. Enderlein, S. Walti and M. Zürn (Eds), Handbook on Multi-level Governance (Cheltenham: Edward Elgar), pp. 80–99.Google Scholar
40. Saurugger, S. (2013) Is there a sovereignty problem in the EU? <halshs-00911482>, p. 6. Available at: https://hal.inria.fr/halshs-00911482/document (accessed 24 February 2016).,+p.+6.+Available+at:+https://hal.inria.fr/halshs-00911482/document+(accessed+24+February+2016).>Google Scholar
41. Murdoch, Z. (2015) Organization theory and the study of European Union institutions: lessons and opportunities. Organization Studies, 36(12), pp. 1675–1692.Google Scholar
42. Ahrne, G. and Brunsson, N. (2005) Organizations and meta-organizations. Scandinavian Journal of Management, 21(4), pp. 429–449 Available at: www.sciencedirect.com/science/journal/09565221/21 (accessed 24 February).Google Scholar
43. Ahrne, G. and Brunsson, N. (2008) Meta-organizations (Cheltenham: Edward Elgar).Google Scholar
44. Kerwer, D. (2013) International organizations as meta-organizations: the case of the European Union. Journal of International Organizations Studies, 4, p. 45. Available at: http://journal-iostudies.org/sites/journal-iostudies.org/files/JIOS2013-special-issue_Kerwer.pdf (accessed 24 February 2016).Google Scholar