"Putting a tax on international financial transactions seems a very sensible idea to me," said Economic and Monetary Affairs Commissioner Joaquin Almunia. Nevertheless he cautioned: "I think that for it to be feasible it will need work," he said at a meeting in Madrid on Friday (18 September).
His comments followed an EU informal summit held in Brussels last Thursday, where many EU leaders took a favourable position concerning an international Tobin Tax.
German Chancellor Angela Merkel, who is seeking to appeal to the German left ahead of national elections on 26-27 September, announced her support for a Tobin Tax upon entering the EU summit venue.
French President Nicolas Sarkozy, a long-time supporter of the tax, reiterated his enthusiasm for the idea. "I think one of the few positive consequences of the crisis is that now we can freely talk of things which could not be addressed before," he said after last week's summit, adding that the topic had been debated by leaders at the meeting "without strong opposition".
Indeed, many ministers showed an interest in the possible initiative, with Italian Prime Minister Berlusconi renewing his calls to fight speculation. But it seems very unlikely that the subject will be on the agenda of the upcoming G20 summit in Pittsburgh. "Strategically it would be a mistake," Sarkozy added.
Before the summit, French Foreign Minister Bernard Kouchner told French business daily Les Echos that UK Foreign Minister David Milliband was in favour of the idea, which would meet with stiff resistance from financiers. Kouchner said a tax of 0.005% on financial transactions could bring in €20-30 billion a year for development.
However, at the EU summit, UK Prime Minister Gordon Brown made it clear that it would be "difficult to ensure compliance to a global Tobin Tax. The issue is as much about practicality as anything else. Until we deal with havens it will be very difficult to implement," he told journalists in Brussels.
The Swedish EU Presidency did not show much enthusiasm for the idea. "I do not think a Tobin Tax will be the right answer," Swedish Prime Minister and current EU President Fredrik Reinfeldt said in response to a question concerning global imbalances.
