Lithuania Will Adopt EU Financial Transactions Tax

Lithuania's Prime Minister has announced that the country will sign up to the EU's Financial Transaction Tax in 2013.

The future financial transactions tax to be small, and tax would have a small effect on bank costs. The new tax would restore public confidence in the financial sector.

At the moment eleven EU countries have signed up to the tax: Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain. The Netherlands has also expressed an interest, provided an exemption for pension funds.

However, some member states have rejected the tax. They believe the new tax is "undesirable" (according to the Dutch central bank), "dangerous" (Swedish Finance Minister) and "simply madness" (UK Prime Minister).

The Alternative Investment Managers Association is also oppose the new tax, as the tax may leave the EU worse off by tens of billions of euros. The Association estimates that the tax will raise approximately from EUR 25 bln to EUR 43 bln, but that the EU's GDP would be reduced by at least between 0.53% (EUR 86 bln) and 1.76% (EUR 286 bln).