9 April 2011


Early in March members of the European Parliament voted overwhelmingly in favour of the introduction of a Financial Transaction Tax (FTT which is sometimes called the 'Tobin tax' after the American economist who first proposed it, or the 'Robin Hood' tax.)

The resolution asked the European Union to if necessary press ahead unilaterally to introduce the tax to raise money to protect public services, help the poorest people at home and abroad and tackle climate change.

However at their recent meeting the leaders of the EU stepped back from full support for the resolution arguing that such a tax is best tackled at global level. Heads of State or Government of 27 nations stressed instead that they must reach an agreement before the G20 Summit June 26-27 in Toronto.

Criticising the decision, the international alliance of Catholic development agencies CIDSE said it was deeply disappointed that European leaders had failed to agree on the introduction of an EU wide FTT.

CIDSE is of the view that a mini tax on short-term and high-risk transactions would stabilise the current financial system and generate millions of Euros badly needed to alleviate poverty and combat climate change.

"A mini tax of only 0.05 percent on each financial transaction would make the financial sector pay for a crisis they created without having an impact on European taxpayers" CIDSE’s financial expert Jean Letitia Saldanha said. "The money generated could save the lives of millions of the world’s poorest people who are hit hardest by the crises the world is currently facing."

A Financial Transaction Tax at a rate of 0.01 percent would generate income of about Euro 100 billion per year in Europe alone, according to CIDSE. It campaigned for the inclusion of an EU wide adoption of a FTT on socially unproductive and speculative trading on financial markets in the run up to the Council.

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