Main navigation

full text search

Content

Image of the cover page of Intereconomics

Current issue

Volume 47 · issue 2 · March/April 2012

Contents

Forum

The Financial Transaction Tax – Boon or Bane?

With articles by D. Schäfer, D. Masciandaro, S. Schulmeister, J. Vella, F. Passarelli, R. Buckley

Other articles

  • Carlo Cottarelli · Sovereign Debt Crises: Why in Europe and not Elsewhere?
  • Manuel Frondel, Christoph M. Schmidt, Colin Vance · Emissions Trading: Impact on Electricity Prices and Energy-Intensive Industries
  • Karl Heinz Hausner, Silvia Simon · The Impact of the Euro Crisis on Switzerland
  • Christine Laabsch, Helge Sanner · The Impact of Vertical Separation on the Success of the Railways
  • Bernd Braasch · Global Monitoring of International Capital Flows

Quote of the Month

The (financial transaction) tax will tend to reward longer-term investments over ultra-short-term trades and thus nudge markets towards better fulfilling their traditional roles and away from serving as financial casinos.

from Ross P. Buckley's Forum article A Financial Transactions Tax: The One Essential Reform

In the current issue

The Financial Transaction Tax – Boon or Bane?

by D. Schäfer, D. Masciandaro, S. Schulmeister, J. Vella, F. Passarelli, R. Buckley

Against the backdrop of the debate over the introduction of a financial transaction tax (FTT) in the European Union, this Forum is dedicated to the discussion of issues concerning the implementation and impact of such a tax on the financial sectors of the member states. Dorothea Schäfer regards as the main policy goal of an FTT to be the prospect of slowing down the mutually reinforcing and growing trends of an increasing number of derivative products and shorter holding periods. The FTT can therefore make an important contribution to preventing the decoupling of financial markets from the real economy. The paper by Stephan Schulmeister discusses the essential features of a general FTT that will ensure that the more short-term oriented and riskier a transaction is, the greater the effect of the FTT on transaction costs. John Vella identifies some commonly made claims about an FTT which are of questionable foundation and compares the FTT with some alternative taxes on the financial sector. Donato Masciandaro and Francesco Passarelli focus on how an FTT measure aimed at reducing financial systemic risk can cause political distortions, leading to inefficient and ineffective policies. Finally, the paper by Ross Buckley analyses common myths, inaccuracies and untruths about the EU’s proposed FTT. more (PDF, 465 kB)

Emissions Trading: Impact on Electricity Prices and Energy-Intensive Industries

by M. Frondel, C. Schmidt, C. Vance

Under the EU-wide Emission Trading Scheme (ETS), CO2 allowances have thus far been allocated largely free of charge. This paper presents a didactic synthesis on the impact of the ETS and argues that such a cost-free allocation will lead to an increase in electricity prices even when strong competition prevails in electricity markets. Electricity prices are also likely to increase as a consequence of the environmentally desirable fuel switch from coal to natural gas in the power sector when certificates are entirely auctioned in the power sector as of 2013. This tendency may be attenuated, but not outweighed, by the price decrease of CO2 allowances over the long term. Subscribe to Intereconomics