The German finance ministry has released a study on the expected revenues of the FTT, written by Copenhagen Economics.
The study has received a very large echo in the German mainstream media today making the headline for instance in the Süddeutsche Zeitung (biggest national daily).
The main message is, that Germany could expect at least 17,5 bn. Euro revenues, which is much more than has been discussed previously.
As the study is in German here some basic results:
1. based on the tax design in the coalition agreement (shares, bonds and all derivatives) the tax base in Germany would be between 18,5 trillion and 188,8 trillion Euro, depending on wether for derivatives the face value or the market value of the underlying would be taken.
2. Accordingly, the tax revenues would be (based on the 0,1% and 0,01 rate of the Commissions’s proposal) 28,2 bn. Euro if there would be no evasion by the industry, and 17,6 bn. considering tax evasion. The authors say, this would be a conservative estimate.
3. From shares and bonds would come some 10 bn. and from derivatives 7 bn. Euro, reflecting the structure of German trade.
4. They calculate a small negative effect on German GDP of 0,6 - 2,4 bn. Euro which is 0,02 -0,09 percent of GDP, which might be largely compensated if the revenue is used for productive purposes.
5. The study does not consider the state of the art of the present negotiations (with bonds excepted, the unresolved conflict over derivatives, the two states approach etc.), which will result in a smaller amount of revenues than 17 bn. Euro.
6. They have not looked into other countries of the ECP.
7. The high figures make some sensation in the media, in particular behind the background of sluggish growth in the Eurozone and pressure on Germany to take counter measures and continuous underinvestment in the increasingly rotten infrastructure of the country. The media make explicitly these links
8. For us, the case is positive because:
a. it draws attention to the issue,
b. strengthens the position of Berlin in the ECP negotiations,
c. puts the revenue issue on the agenda,
d. counters some propaganda myths of the finance lobby,
e. delivers some new and interesting technical information.
9. Risks for us are:
a. the relatively small share of revenues from derivatives would increase the readiness of Berlin to compromise with Paris on derivatives.
b. the link to Euro crisis and infrastructure creates strong competition for development and environment.
10. We have published a press release today, with our demands, including the proposal that the ministry commits to a common position of the eleven in ECP on revenues for environment and development.
Peter Wahl
WEED - Weltwirtschaft, Ökologie & Entwicklung
Eldenaer Str. 60, 10247 Berlin
