June 28, 2011
Guest post from CIDSE, the international alliance of Catholic development agencies
Until recently a tax on financial transactions appeared a far away dream. The rapidly increasing public and political support for the tax shows, however, that the global campaign in favour of financial sector taxation has come a long way. Most recently, statements by European Commission President Barroso and Commissioner for Taxation and the Customs Union Semeta are an important and welcome signal of the European Commission’s stance on the Financial Transaction Tax (FTT).
Commissioner Semeta, a key player in forming the EU’s position on the FTT, was quoted in the 21 June edition of the newspaper Financial Times that he believed that ‘there are ways to implement a financial transactions tax in the EU while mitigating the main risks identified.’
In a press conference on the same day President Barroso stated that he had written a letter to European Council President Van Rompuy informing him that a legislative proposal on a financial transaction tax would be put forward after the summer.
These statements are welcome on the eve of the European Commission releasing an impact assessment on the Financial Transaction Tax along with another mechanism, the Financial Activities Tax. Many EU member states are reserving decision-making on the FTT until after this assessment is released.
Successive reports from the IMF and the European Commission itself, and the various academic studies that have established the feasibility of the FTT, have certainly influenced this stance. The pressure of European civil society and most notably the European Parliament’s (EP) many calls for the implementation of an FTT have also not missed their mark. The most recent EP resolution (March 2011) calling for an EU-wide FTT has been echoed by an FTT resolution in the Belgian parliament on 23 June, which says its revenues should be used for development and action to combat climate change. Recently also the French and German parliaments voted overwhelmingly in support of joint action on the FTT by their countries.
These developments show how the FTT debate has evolved. The train is on track, the question is whether it will reach its final destination. FTT revenues could alleviate fiscal pressures on European economies, help governments to honour promises made to reach the Millennium Development Goals by 2015 and fill a still empty UN Green Climate Fund, designed to finance urgent climate action. An FTT could mean so much for people and the planet and Europe can make it happen.
Ms. Jean Letitia Saldanha
CIDSE, an international alliance of Catholic development agencies