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Slovenia Wants to Introduce Financial Transactions Tax

Ljubljana/Brussels, 05 October (STA) - Slovenia plans to join a core group of EU countries in introducing a tax on financial transactions. The government unveiled the plan Thursday and European Commission said Friday it had already received a formal expression of interest from Slovenia.

The government believes a tax on financial transactions would net EUR 50m in additional budget revenue, a much needed boost for public finances as the government strives to narrow the budget gap.

The idea for the tax originates from Germany, which initially wanted a system covering the entire bloc. But after fierce opposition in particular from Great Britain, it decided to put together a core group of countries to implement the plan.

Aside from Germany and France, Belgium, Portugal and Austria have so far officially requested to join the plan, which would be carried out as part of the so-called enhanced cooperation, but in order to proceed at least nine countries have to come on board.

The tax will also be on the agenda of a meeting of EU finance ministers on Tuesday. Greece and Estonia are reportedly interested in joining the scheme as well.

The government's plan has been met with apprehension in Slovenia.

Banka Slovenije, the central bank, voiced opposition to the plan, saying the current economic situation was "inappropriate".

"There is a danger that the additional tax burden will be shifted over to users of financial services...The tax could also have a negative impact on the international competitiveness of Slovenian banks," the central bank said in a statement for the STA.

The Slovenian Investment Fund Association said the tax would have "a devastating impact on the industry": since investment fund management in the EU is liberalised, the tax would lead to migration of the funds to other EU countries.

The group said the financial effects of the new tax would be negligible in a year or two, as the fund managers would relocate and corporate income tax revenue would drop, offsetting any new tax revenue.

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