In a breakthrough moment during Tuesday’s European Finance Ministers meeting, 11 countries signed up for a Financial Transaction Tax (FTT). Europe’s biggest economies Germany and France are joined by Spain, Italy, Austria, Belgium, Portugal, Greece, Slovenia, Slovakia and Estonia, to take a lead in showing the rest of Europe that FTTs are more than a great idea – they are possible.
Countries across Europe are waking up to the possibility that there is a way to deal with the backlash from the financial crisis and that the banks need to pay their fair share. Signalling a change in temperature for support of an FTT, the 11 countries surpass the threshold of 9 needed to introduce the tax using the ‘enhanced cooperation‘ method within the European Union – meaning this group can now move closer towards implementation.
The FTT is expected to raise tens of billions of Euros a year. This revenue will be collected nationally – meaning it’s up to each individual country to decide how to spend the money. Both France and Germany, who have been spearheading the FTT, are against using the revenue for the European Union budget. Now we must ensure the money is used to tackle poverty and climate change so the tax can truly be worthy of the name ‘Robin Hood’. Fortunately we have friends on side. France and Germany have both reiterated that part of the revenue will be spent in this way. This was confirmed this week during a press conference when European Union Tax Commissioner Algirdas Semeta stated:
“…The FTT proposal is a stand-alone proposal. If introduced, the Member States can use the revenues for the purposes they may consider as most appropriate. We know that many Member States have strong commitments in terms of financing development aid.”
Head of the International Monetary Fund Christine Largarde spoke today at the International Symposium on Innovative Financing Mechanisms and Financial Transaction Tax, stating the development as “a good step in the right direction.”
A strong signal is being sent that alternative forms of finance are possible at country level, showing the UK Government that it can be done. More and more countries are looking to raise much needed revenue and take a step towards curbing casino-style banking, suggesting that London may well be left standing outside in the cold.
In response Owen Tudor, spokesperson for the Robin Hood Tax campaign, said:
“It’s great news that so many countries are uniting behind a tax that will help rein in the banks and raise billions in much needed revenue… It’s unfathomable that the UK Government can turn down billions just to protect their friends in the City whilst increasing cuts that will hit the poorest hardest.”