The European Commission released its long-term budget strategy today (press release here). Excitingly, it includes a suggestion to finance the EU’s activities through an EU Financial Transaction Tax.

Mr. Tobin first suggested the idea of taxing financial transactions, and the Robin Hood Tax coalition has been campaigning for it for two years. A public consultation on the issue illustrated strong polarization of opinion, with the financial industry strongly opposing the tax, while the general public strongly supported it. The first great victory came in March 2011 when the European Parliament approved the idea. Subsequent widespread campaigning, including a Global Day of Action, were important in securing this second important step. Not only does the tax have the support of the institutions, it also has the public support of notable European leaders, including President Barroso, Taxation Commissioner ŠSemeta, and Budget Commissioner Lewandowski. This story illustrates how well-organized civil society initiatives will always triumph over the vested interestes of privileged individuals, thus adding confidence to the EG4H agenda.

The Financial Transactions Tax has the potential to hugely benefit international development and global health, by supplying up to 100 Billion USD of additional aid every year. However, a number of things need to be done for this to be achieved, namely:

1. The EU has, to date, suggested that the revenue of the tax will be spent mainly in Europe. Civil society has to put pressure on the EU to spend only 50% of this extra money at home, leaving 25% to be spent on international development and 25% on climate change.

2. The EU Commission suggests that the tax will become law only in 2018. There is little reason for this delay, and there is the threat that the next commission in 2018 will scrap the idea. Civil society has to put pressure on the EU to impose the tax quicker.

Once an EU-wide FTT has been created, we can look forward to a G20-wide FTT. The EU heads of state will discuss the EC tax proposal on 17-18th October, ahead of the G20 summit in November. Advocacy and campaigning will be critical in pushing the swing of the pendulum in the right direction. For example, Britain is surprisingly reluctant to support the tax, which is why we need more letter writing like this to get UK MPs behind it. Watch this space on how you can get involved, either at the national, EU and G20 level.

Taavi Tillmann

Share/Save