Borg seeks US-inspired European bank tax

Swedish Finance Minster Anders Borg on Tuesday called for a European bank tax similar to a new US scheme, in an attempt to rectify shabby public finances and create a cushion to protect against future financial crises.

Borg seeks US-inspired European bank tax

Borg arrived at Brussels talks with European Union peers seeking to impose a bloc-wide levy he says will “pay for the impact the rescue measures have had on our public finances.”

Slamming a Greek debt mountain and economic misreporting as “fraudulent” and “a cost for the whole of Europe,” Borg insisted that the EU can no longer “accept the situation where the banks are running away from the bill.”

“This is something that has been introduced in the United States, and we already have a similar system in Sweden.

“This is a tax, a fee that could bring substantial revenues for dealing with the public finance situation but also to take care of future banking crises.”

Borg said that a tax on final balance sheets — different from a tax on individual transactions as mooted since the 1970s — would get round the problem of banks moving to more favourable locations.

“You can’t move your balance sheet out of the country so it’s a much more logical model,” he insisted, claiming “support among several of my colleagues for this idea.”

In a letter to fellow ministers, Borg said “the financial system should pay for the actual cost it incurs on society” in a move he said would legitimize bailout action among public opinion.

He said the Swedish model, introduced in 2009, comes in at 0.036 percent of final balance sheets, and is already equal to 1.0 percent of Swedish gross domestic product, with a target value of 2.5 percent of GDP in 15 years.

“The advantages are obvious,” he insisted compared to a transaction or turnover tax. “Smaller liabilities are encouraged as they incur a lower actual fee.”

Britain’s Chancellor Alistair Darling told The Scotsman newspaper at the weekend that London would not match President Barack Obama’s plans to recover “every single dime” taxpayers shelled out to rescue Wall Street.

The head of the 16-country eurozone, Jean-Claude Juncker, has also warned that it would be “difficult to adopt a common approach because tax matters are reserved for national decision-making” across the EU.

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REVEALED: EU plans digital-only Schengen visa application process

Soon those non-EU nationals requested to have a Schengen visa to travel to European countries will no longer need to go to a consulate to submit the application and get a passport sticker, but will be able to apply online. 

REVEALED: EU plans digital-only Schengen visa application process

The European Commission has proposed to make the Schengen visa process completely digital.

The special visa, which allows to stay for tourism or business (but not work) in 26 European countries for up to 90 days in any 6-month period. 

Nationals of third countries such as South Africa, India, Pakistan and Sri Lanka need the Schengen Visa to visit Europe, but they are not needed for other non-EU nationals such as Britons or Americans. You can see the full list of countries who need a Schengen visa here.

The proposal will have to be approved by the European Parliament and Council, but is in line with an agreed strategy that EU governments are keen to accelerate in the aftermath of the pandemic. 

Once agreed, the system will be used by the countries that are part of the border-free Schengen area. These include EU countries, excluding Ireland (which opted out), and Bulgaria, Romania, Croatia and Cyprus (which do not issue Schengen visas). Iceland, Norway, Lichtenstein and Switzerland, which are not EU members but have signed the Schengen Convention, will be part of the new system too.

Paper-based processes required applicants to travel to consulates to submit the application and collect their passports with the visa, a procedure that “proved problematic during the COVID-19 pandemic,” the Commission said.

Some EU countries have already started to switch to digital systems but not all accept online payments for the visa fees. 

When the new system will be in place, the Commission says, applicants will be able to check on the EU Visa Application platform whether they need a visa. If so, they will create an account, fill out the application form, upload the documents and pay. 

The platform will automatically determine which Schengen country will be responsible for the application and applicants will be able to check their status and receive notifications. Travellers will then be able to access the visa online, and if needed extend it too.

“Half of those coming to the EU with a Schengen visa consider the visa application burdensome, one-third have to travel long distance to ask for a visa. It is high time that the EU provides a quick, safe and web-based EU visa application platform for the citizens of the 102 third countries that require short term visa to travel to the EU,” said Commissioner for Home Affairs Ylva Johansson.

“With some member states already switching to digital, it is vital the Schengen area now moves forward as one,” said Commission Vice-President for Promoting our European Way of Life, Margaritis Schinas.

However, first-time applicants, people with biometric data that are no longer valid or with a new travel document, will still have to go to a consulate to apply.

Family members of citizens from the EU and the European Economic Area, as well as people who need assistance, will also be able to continue to apply on paper. 

The EU Visa Application platform will be used from third countries whose nationals must be in possession of a visa to enter the EU and is different from the ETIAS (European Travel Information Authorisation), which is currently under development.

The ETIAS will be used by non-EU nationals who are exempt from visas but who will need to apply for a travel authorisation prior to their trip. This will cost 7 euros and will be free for people below the age of 18 and above 70. 

Based on the discussion between the European Parliament and Council, the Commission could start developing the platform in 2024 and make it operational in 2026. EU countries will then have five years to phase out national portals and switch to the common online system.