Noonan says no to EU tax fast-track

Finance Minister Michael Noonan has appealed for the EU to slow down the process of putting a financial transaction tax in place, saying he was not willing to participate if the legislation was pushed through on a fast-track basis.

He told his fellow EUfinance ministers there were other methods of taxing the banking system that should also be considered.

Germany and France will push the EU to agree to the tax at next Monday’s summit. If they fail to convince all 27 members, they will suggest the eurozone countries adopt it.

But Ireland is among a number of countries that believes the tax on transactions will put them at a disadvantage and force companies to move elsewhere, such as the City of London, as Britain has said it will not adopt such a tax.

Mr Noonan said the proposal from the Commission on the tax would yield a good return, but there was a downside, namely a reduction in growth.

Mr Noonan had a strong ally in his approach in the Swedish minister, Anders Borg, who said that his country’s experience with such a tax some years ago should serve as a warning to other, as they lost a sizeable proportion of their financial services sector as a result.

The EU should instead copy the Danish model that has had a tax on financial activity for some time without any detrimental effects.

The decision has yet to be made on whether the draft legislation has sufficient support to go through the European parliament in one reading, or as Mr Noonan suggested take the longer route with two readings.