Oxfam's EU Advocacy office in Brussels

“A politician, an academic, and a Eurocrat sat in a room talking about tax – it sounds like the start of a funny joke but in fact it is for a considerably important matter,” remarked CIDSE’s Jean Saldanha at the start of a conference in Brussels last week asking “A financial transactions tax: viable solution or impossible dream?”.

The event, co-hosted by the UK’s Institute of Development Studies, Oxfam, CONCORD and, CIDSE, was held at an opportune moment as the political momentum across Europe is growing towards a Financial Transaction Tax (FTT).

New figures released this week from Oxfam show that an EU-wide FTT of about 0.05% on bond, share, currency and derivatives would raise €210bn every year.

Today, activists in over 35 countries will unite to issue a gallant call to the European heads of state to back a FTT through flashmobs and rallies to photoshoots with Robin Hood and political leaders. The ‘Global Day of Action‘ is designed to put pressure on European leaders meeting in Brussels later this week (23-24 June) to ensure banks repay their debt to society.

Clearly, Europe has a chance now to lead the world in making the financial crisis a turning point in the fight against poverty and climate change.

In recent months the European Parliament as well as the French, German and Spanish Parliaments have all carried resolutions supporting an FTT, and the European governments of Austria, Belgium, Greece, Luxemburg, Portugal, and Slovakia have also proclaimed themselves in favour.

Slowly-but-surely, even two of the major multilateral institutions – the IMF and the European Commission – are changing heart and have gone from slamming the idea as unrealistic to admitting that it is feasible and progressive.

The Commission is to announce its plans for the EU budget on June 29th and is expected to propose some form of tax on financial transactions.

Indeed the Commission President José Manuel Barroso declared before the European Parliament just two weeks ago: “I’m in favour of a Financial and Capital Transactions Tax and the Commission will come forward with its ideas of this in the near future”.

Speaking at the event last Monday, Anni Podimata, the Greek MEP who authored a resolution adopted en masse by the European Parliament in March calling for an EU-wide FTT, explained that the tax is “an extra tool to reinstall justice” and that proposing one was “not about revenge [on the financial sector] but responsibility” shifting the taxation burden “from consumers onto the financial institutions”.

“Member states are still carrying on with the same dangerous attitudes that caused the crisis” and while “there is no data showing an effect on capital flows, any proposal should be well designed and carefully implemented,” she said.

Referring to a recent report by the IMF that revealed that at least 16 of the G20 economies have had some form of a Financial Transactions Tax in place over the last decade or two, Ms Podimata said “it is political will, not technical issues, that is blocking this momentum.”

 

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