The time is ripe for a pan-EU tax on financial transactions in order to curb financial speculation and raise revenue, write Socialists & Democrats group (S&D) MEPs Anni Podimata and Udo Bullmann.
This commentary was authored by Greek MEP Anni Podimata, the European Parliament's rapporteur on innovative financing, and German MEP Udo Bullmann, S&D group coordinator for economic and monetary affairs.
"The time is now. That is our strong conviction which will define our stance going into next week's plenary debate and subsequent vote on the introduction of an EU-wide tax on financial transactions (FTT).
As national governments battle to get their finances in order, we have a responsibility to our citizens and it is one we must take very seriously indeed. Taxpayers are the ones who have been forced to bear the brunt of the financial crisis, not only through direct contributions to bolster the banks and save them from collapse, but also through rising unemployment, falling incomes, reduced access to social services and rising inequalities. Failure to take decisive action and prove we have learned lessons from this crisis is simply not an option.
In February, the European Commission launched a public consultation on taxation of the financial sector. This consultation is welcome and the results will, hopefully, force the executive to reconsider its preference for a financial activities tax (FAT) at EU-level over an FTT. Continued preference for a FAT, unless it is a complementary instrument to an FTT, would be regrettable to say the least, as it does not offer the same benefits of an FTT, either in terms of generating revenue or curbing harmful high frequency trading.
A low-level FTT (around 0.01 to 0.05%) is capable of generating up to €200bn at EU level alone and €470bn at global level – money which, in times of spiralling public deficits and tough austerity measures, would provide a welcome boost to government coffers. Tough times call for brave decisions, and EU member states can no longer afford to hide behind inaction at global level. Instead, they must demonstrate the leadership they so often profess and lead the global campaign by implementing as a first step an FTT at EU level.
Last October, the European Parliament adopted Pervenche Berès' report on responses to the crisis by an overwhelming majority asking for global agreement on an FTT or, failing that, the introduction of an FTT at EU-only level as a first step. The resolution was backed by deputies spanning the political spectrum.
These same deputies must prove their mettle once more by supporting an EU-wide FTT when the issue goes to the vote in Strasbourg. Given the magnitude of what is at stake, cynical and short-sighted U-turns cannot be justified. Taxing dangerous speculation and restoring the stability of financial markets is something which must transcend party politics. It's up to us to make the first move. It's now or never, and failure is simply not an option."