Barnier stresses need for common support of Tobin tax

European Commissioner Michel Barnier said it will be up to member states to decide whether a tax on financial transactions and the movement of capital will be implemented, after Malta joined British opposition to the so called Tobin Tax - a tax on financial transactions.

European Commissioner for the internal market Michel Barnier was in Malta today for talks with finance minister Tonio Fenech.

"I understand the Maltese government's opposition... but this why the Commission proposes, and member states decide. I have no religion or philosophy with regards to how economies should be run. But I am confident the EC's plans for a better managed eurozone and Europe will definitely benefit businesses and consumers alike," Barnier told journalists at a joint press conference after meeting Fenech.

Barnier praised Malta's handling of its economy, but advised the government to keep an eye on reducing its national debt which is now close to 69% of gross domestic product.

However the Commissioner said EU member states had to pull the same rope together, or carry the responsibility of their decisions.

EU policymakers have suggested a tax on financial trading to raise cash for a range of areas from development to bailouts, but Britain has rejected the idea with Chancellor George Osborne describing it as a "bullet aimed at the heart of London".

Barnier however made a point of stressing that EU member states should have each other's back on the tax proposal.

Barnier today said member states were engaged in "normal discussions" but he insisted that the situation was very serious and that every single member state had to "do its job at home and support member states... one for all and all for one."

"I don't want to sound either catastrophic or pessimistic, but we have a problem and we must address it. We're taking into consideration the realities of each and every single country but now is the time for us to take stock and plan on the lessons learnt from the 2008 financial crisis."

In a statement later in the day, Alternattiva Demokratika chairperson Michael Briguglio called for national support for the Tobin tax. “Solidarity is a key value in the European Union. The proposed financial transactions tax that is being proposed by the European Commission will help generate revenue which can be used to strengthen the European economy. It is estimated that such a tax could generate up to €55 billion a year.

“It is high time that banks and financial institutions participate in responsibility sharing for the economic crisis, especially since they received massive help from public funds when this was needed. If workers and employers are paying tax to help sustain economic and social stability, then it is only fair that banks and financial institutions do the same.”

Barnier said the European Commission had prepared 50 proposals which had been put on the table for discussion. "Together we can do it, but each and every single country must carry its responsibility to make things effective."

Barnier was also asked about his calls to break up the four major audit firms into smaller firms. "This is not just for audit firms but also credit rating agencies. It is not my agenda... we're putting into practice a G20 proposal to ensure more competition and transparency through a simple system of rotation and credibility."