The Eurozone could go it alone with an FTT of around 0.28%

There's one bit of analysis that I put in my Youtube presentations (English and French) that I had neglected to mention on my blog. It's the realisation that the Eurozone countries could go it alone and implement the 0-0-0-0.x plan on their own - even if the UK continues to block implementation of a financial transaction tax at the European level.

The argument uses the numbers I got from the ECB website that gives fairly detailed numbers for transactions in the 17 Eurozone countries. Here they are:

Altogether, visible transactions within the 17 Eurozone countries total some 1,488 trillion euros. This compares with a total for tax revenue for the 17 countries of a little more than 4 trillion euros. Conclusion? You could replace all the exisiting taxes with an FTT of around 0.28%.

The rates in each country vary quite a lot. Belgium would only need 0.05% - thanks no doubt to the fact that it is a major player in Central Securities (nearly 287 trillion a year). And Luxembourg woul only need 0.02%! Intriguingly, even Spain, which is supposed to be in a catastrophic condition, would only need to impose a tax of 0.19%. Other countries, like Austria, Estonia, Malta and Slovenia might require rates above 1%. But, surely, even citizens in those countries would be happy to pay 1-2% on each transaction if it meant that they could forget about VAT and income tax?

And maybe the Eurozone countries could negotiate together so that some of the massive revenue generating capacity of countries like Belgium and Luxembourg could be shared with other countries. Surely, there are times when a bit altriusm can be justified if it is for the common good.

Obviously, the numbers provided here assume that transactions continue at their current levels. And of course, there will be those who would claim that any financial transaction tax would cause transactions to collapse. But who can predict how much of a boost to the real economy would be provided by scrapping the other taxes? Just imagine what would happen if the eurozone became a place where multinationals could declare their profits without paying taxes. Surely, all those companies who are currently stockpiling their trillions in profits in offshore tax-havens would move the money back into the Eurozone. And the 0.28% tax they might have to pay would be well worth it.

Think about it.