PHM-Exch> Europe moves forward on Robin Hood Tax while US Secretaries Clinton and Geithner balk

[Claudio Schuftan]

From: Luke Holland <lholland at cesr.org>
**


*Europe moves forward on Robin Hood Tax while US Secretaries Clinton and
Geithner balk*



Europe’s much talked-about financial transactions tax has come one step
closer after a coalition of 11 countries – including France, Germany, Italy
and Spain – agreed to move ahead with the initiative despite the opposition
of several other states. A number of countries, such as Britain and Sweden,
remain opposed to the ‘FTT’, but at a meeting of European Union finance
ministers on Tuesday its proponents decided to avail of the EU’s ‘enhanced
cooperation’ facility, thereby clearing the way for officials to begin
designing the mechanism.


Much work remains to be done if the FTT is eventually to become a more
widespread reality, however, as certain key states remain reticent. Indeed
representatives of the world’s largest economy have been accused to trying
to convince other countries not to go ahead with it. In a joint letter
(see: http://www.cesr.org/downloads/ftt.clinton.joint.letter.pdf?preview=1)
to US Secretary of State Hillary Clinton and Secretary of the Treasury Tim
Geithner, CESR joined a large group of US civil society organizations such
as ActionAid, Friends of the Earth US, Grassroots Global Justice Alliance,
National Nurses United and Tax Justice Network USA to call on the US
government to stop discouraging other nations from considering an FTT. The
letter was issued after a US official made misleading statements, insisting
that the FTT was not feasible. Paul Bodnar—a  member of the US climate
negotiating team—argued at a recent UN meeting on climate change financing
that it would be all but impossible to implement the FTT globally, and that
financial traders would find ways to circumvent it anyway. He also affirmed
that finance for climate change mitigation — one of they central
motivations cited by those advocating for the FTT – should be directly
linked to emissions. His arguments are rebuffed in the joint letter, which
was signed by some 63 civil society organizations. Such taxes do not have
to be global to be effective, as demonstrated by the fact that they are
already up and running in many countries, and international financial
transactions are actually relatively easy to monitor. The idea that a tax
must be directly linked to the source of taxation, meanwhile, is patently
erroneous. The weight of the civil society initiative, led by Friends of
the Earth, was reflected in extensive media coverage as influentia
institutions such as Bloomberg reported on the letter (see:
http://www.businessweek.com/news/2012-09-28/clinton-urged-to-support-robin-hood-tax-to-fund-climate).


 Civil society has also targetted World Bank President Jim Yong Kim in a
joint letter (see:
http://www.cesr.org/downloads/Civil%20Society%20Letter%20to%20Dr%20Kim%20on%20FTT.pdf?preview=1),
calling on him to use his position to champion the ‘Robin Hood Tax’, as it
has come to be known. CESR added its voice to that of 57 other
organizations by signing the communiqué, which provided yet more evidence
of the growing civil socity consensus on the practicality and importance of
the FTT. The viability of the financial transaction tax is further
underlined by the backing it has received from many prominent economists
and political actors. Support from leading business figures like Bill Gates
and Warren Buffett is mirrored in the endorsement of political and
diplomatic leaders such as Kofi Annan, Al Gore and even IMF boss Christine
Lagarde.



In a time when multiple crises are exacting a devastating toll on the
wellbeing of ordinary people everywhere, political leaders would also do
well to remember the human rights principles underpinning calls for the
financial transactions tax. The measure would go some way to integrate a
modicum of equality and progressivity into a system where these are sorely
lacking. Keeping in mind the role high-frequency trading has played in
provoking the food and fuel crises, not to mention ongoing economic
quagmire in which the world finds itself, the FTT could also help in
preventing human rights abuses by third parties, as is required by
international human rights law.



But perhaps most obviously, the FTT is precisely the kind of common-sense
measure that would help governments comply with their obligation to
mobilise the “maximum of available resources” for the protection of
economic and social rights. It is estimated that the European FTT could
raise in excess of €57 billion (US $75 billion) a year for the protection
economic and social rights, while an FTT rolled out across the G20 group of
nations could mobilise in excess of $250 billion.



 To learn more about the FTT, see:
http://cesr.org/downloads/FTT%20Human%20Rights%20Imperative.pdf?preview=1
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