EU crisis summit
Financial Transaction Tax (FTT) should not be reduced to stock tax, development networks CIDSE and APRODEV say
(Brussels, 30/01/2012) – At today’s EU crisis Summit, European leaders discuss next steps for the implementation of a Financial Transaction Tax (FTT). In order to win UK support for a tax on the financial sector, Germany and France are looking for alternative solutions. CIDSE and APRODEV warn that an FTT should not be stripped down to a stock tax if it is to serve as a tool of stability, justice and sustainable development.
The Catholic and Protestant development networks call for a tax which would cover a broad range of transactions, arguing that only such a tax would impact high frequency trading and generate sufficient revenues to tackle poverty and climate change.
Georg Stoll of Misereor, German member organisation of CIDSE, said: “Parts of the French and German governments seem to be giving in to the stead-fast opposition of the UK, reducing their efforts for a comprehensive EU FTT. Buying a vague chance for support from London at the price of loosing credibility at home would be a poor deal for Paris and Berlin.
The public can see what it is: surrendering to vested interests of a strong financial sector that governments still claim to monitor and regulate, without any political will to ensure that the regulation is meaningful and has impact. Watering down the FTT to a mere stock tax with many loopholes doesn’t do the job of curing an ailing system and raising sufficient money to tackle poverty and climate change.”
Only an FTT that integrally covers all spot and derivative trading would impact short-term trading which has no added value for the real economy.
Karin Bassler of Brot für Welt, member organisation of APRODEV, said: “We support progressive forces in the French and the German government who are working for the implementation of a tax not just on the trading of shares but also on trading financial instruments such as derivatives and corporate bonds. We urge the Danish EU Presidency to work towards a consensus on the speedy adoption of such a comprehensive tax.”
By having the most impact on highly speculative trading, an FTT is one of several measures to reduce excessive and uncontrolled risk taking and unsustainable virtual growth linked to this kind of unproductive activities. Through an FTT, countries can build up a more resilient financial system.
According to the European Commission’s proposal, an FTT could generate 57 billion euros annually. CIDSE and APRODEV argue that such revenues, if properly channelled to tackle poverty and climate change, could have a major positive impact on people’s well-being and that of the planet.
The creation of the Green Climate Fund was a small breakthrough at the recent climate talks in Durban. It would be a missed opportunity, in times of austerity, if Europe fails to adopt a sufficiently broad tax which could generate the revenue it needs for climate finance and to honour pressing commitments to eradicate poverty at home and internationally.
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Contact: Roeland Scholtalbers, CIDSE Media & Communication Officer, +32(0)2 282 40 73, +32(0)477068384, scholtalbers(at)cidse.org
Notes to the editors:
• CIDSE is an international alliance of Catholic development agencies. Its members share a common strategy in their efforts to eradicate poverty and establish global justice. www.cidse.org
• APRODEV is the association of 16 development and humanitarian aid organisations in Europe that are linked to the World Council of Churches (WCC). www.aprodev.net
• MISEREOR is the German Catholic Bishops’ Organisation for Development Cooperation. For over 50 years MISEREOR has been committed to fighting poverty in Africa, Asia and Latin America. www.misereor.de
• Brot für die Welt (Bread for the World) is an aid programme instigated by the Protestant churches in Germany in 1959. It works jointly with local churches and partner organisations in Africa, Asia, Latin America, and Eastern Europe on over 1,000 projects, all of which are aimed at helping people to help themselves. http://www.brot-fuer-die-welt.de/
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