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Finland steers clear of financial transaction tax

Finland has decided that it will not join a group of eleven other European Union states that have signed up to be at the forefront of preparing a financial transaction tax.

Government’s EU ministerial committee decided Friday to pass on preparing the controversial financial transaction tax. The Ministry of Finance has proposed that Finland should be part of the group working on the levy.

However the government partners remained divided on participation in the preparatory work, with ministers from the Green League, the Social Democratic Party and the Left Alliance supporting the proposal. The National Coalition has said it would support the plan only if the tax were to be widely adopted across the EU.

Yle was told that following the debate, Prime Minister Jyrki Katainen decided that Finland would not get on board with the eleven other EU members that have agreed in principle to adopt the tax.

The National Coalition has argued that the tax could lead to job losses in Finland if banks transfer operations affected by the tax to other locations. Prime Minister Katainen has said it is important to consider neighbouring Sweden’s position on the issue, and has pointed out that Sweden will not be part of the group preparing the levy.

Green League chair Ville Niinistö said it was a mistake for Finland to drop out of the process. Writing in his blog, he said that it would be to Finland’s advantage to exercise its influence in the pioneer group to ensure that any possible negative repercussions would not come to pass. He called on Finland to continue to work towards widespread adoption of the tax.

“The tax could reduce speculative financial transfers and create economic stability. The tax would address structural problems which are also at the root of the EU economic crisis,” Niinistö added.

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