Moment Of Truth For The Financial Transaction Tax

A crunch vote in the European Parliament next week will put pressure on the Commission and the Council to propose a financial transaction tax (FTT) at EU and global level.

Greek Socialist Anni Podimata is winning steadily increasing support for the tax across the Parliament’s political groups. Her aim is for the Parliament to have a strong voice to confront the Commission’s reluctance to act on the issue.

Ms Podimata’s report on innovative financing is to be debated on Monday afternoon with a vote on Tuesday.

Said Ms Podimata: “The crisis has hit taxpayers hardest, not only through direct contributions to save the banks but also through rising unemployment, falling incomes, reduced access to social services and rising inequalities.

“At the same time, the financial sector remains largely exempt from taxation. A financial transaction tax would put an end to such an injustice.

“A tax of only 0.01 to 0.05% on financial transactions could produce 200 billion a year in Europe. This, according to a recent Commission report, is the level of investment the EU needs to make every year for the next 10 years in transport, energy and information and communications technology alone. It could also help the EU to meet its commitments to the Millennium Development Goals.

“In these times of austerity, it would be foolish to ignore the potential revenues from such a tax. Using this money would make the financial sector contribute to the real economy which is exactly the change of behaviour we expect.

“A financial transaction tax would also curb the harmful speculative behaviour that led to the global financial crisis”.

Said S&D spokesman for economic and monetary affairs Udo Bullmann: “The failure of conservative and liberal MEPs to provide enough support for the proposal led to a tied vote by 21 to 21 in committee, as a result of which it was lost.

“We hope that the vote in plenary will be more consistent. It is high time to show leadership. We have to give Parliament a voice. The EU will have no international credibility if it doesn’t signal its determination to introduce it in Europe.

“Claims that an FTT imposed in the EU alone would result in severe market distortions and a lack of competitiveness are simply cock-and-bull. Investors will not ignore the biggest financial market in the world because of 0.05% tax”.

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