Quartet of Representatives Turns Down Again a Government Proposal for a Financial Transaction Tax



Xouliarakis_TsakalIn seeking ways to close the “fiscal gap,” the Greek government has proposed to the country’s lenders on at least two different occasions imposing a financial transaction tax. The proposal was rejected both times.

Nonetheless, Greek officials involved in current negotiations talks with the representatives of the quartet institutions did not give up on the idea and proposed again imposing a financial transaction tax as a way to generate extra revenues. It was rejected again.

From the respective of Greece’s official lenders, this is a measure that would create serious problems in banking transactions and on the entire banking system, while it might also put a break on the use of plastic money.

The idea of a financial transaction tax has been originally introduced during discussions for the introduction of the first bailout agreement in 2010 and was proposed again last May by ex-former finance minister Yanis Varoufakis.

The Greek government must find ways to eliminate a fiscal gap of 3 points. The plan is that 1% of the fiscal gap will be closed via reforms in the nation’s pension system, another 1% via new taxes, and the remaining 1% from other sources.

The European Commission itself has proposed a European Union financial transaction tax (EU FTT) within some of the member states of the European Union. The proposal was originally intended to kick into effect by January 1, 2014, later postponed to January 1, 2016, and then to mid-2016.