As talks progress on a €2 trillion EU coronavirus recovery package, German leaders have responded to the pandemic with calls for a streamlined financial transaction tax, global minimum taxation, and taxes on carbon emissions.
In her weekly podcast April 25, Chancellor Angela Merkel said Germany will focus its upcoming EU Council presidency, which begins July 1, on dealing with the coronavirus through social, economic, and environmental efforts.
“The question will be, where can we do better, grow together, and maybe agree on certain things? For example, on one financial transaction tax, on minimum taxes, on the question of a common emissions trading [scheme] in the field of ships or aircraft,” Merkel said.
Merkel also alluded to the possible formation of an EU-wide healthcare system following the challenges of coordinating separate health responses among member states during the coronavirus pandemic.
On April 23 Merkel said she would support a €2 trillion EU coronavirus recovery package, but she did not indicate what Germany’s contribution would be. She said the plan would have to go into effect by June 1, and that Germany’s support depends on how the money will be used.
That same day, Finance Minister Olaf Scholz said EU member states should move toward a fiscal union to coordinate a response to the pandemic. A global minimum taxation level, which Germany hopes to see agreement on by the end of 2020, should be included to curtail tax dumping, he said.
Scholz, along with French Finance Minister Bruno Le Maire, wrote a paper in 2018 advocating for minimum taxation, which formed the basis of the OECD’s global anti-base-erosion proposal.
EU member states could also look at a financial transactions tax and taxing carbon emissions on air transport as a source of increased revenue, Scholz said.