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

Two economists at the influential and respected Institute of Development Studies have just published a systematic review of  the evidence for and against financial transaction taxes (FTTs). They find “no reason to believe” that a FTT would be “significantly worse than most alternatives, nor that it would be any more difficult to collect”. Lire la suite…

The Guardian on-line is running a poll on the need for IMF voting reform. It is well worth voting – but it misses the point. Besides confusing the process for selecting the Managing Director (on which the US takes a back seat, leaving the choice to the European governments) with the weighted voting system, the only alternative it presents to the status quo is reform to “reflect the shift in global economic power towards emerging markets”.

As the Commission on Social Determinants of Health said,

“It is only through such a system of global governance, placing fairness in health at the heart of the development agenda and genuine equality of influence at the heart of its decision-making, that coherent attention to global health equity is possible.” Lire la suite…

Over the past 18 months, Economic Governance for Health (EG4H) has continued to spread the message on the importance of global economic reform for health outcomes – and campaigned widely on issues including tax reform, and improved accountability for international institutions. 2011 is proving to be a very big year for economic governance and health; we’re reviving the EG4H newsletter to help you stay abreast of developments in this fast-changing field.

In this newsletter from EG4H…

• Call for EG4H ‘Outreachers’
• News round-up: details on the relentless progress of Robin Hood Tax campaign; interesting changes at the IMF and World Bank; and WHO’s consultation on social determinants of health
• Just out: links to some important recent writing on global economic governance and health
• A brief update on student branch activities
• How you can get involved Lire la suite…

Important news from the UK, where a group of MPs has recently submitted a parliamentary motion arguing for reduced income inequality. The key passage from the Early Day Motion (EDM) is here:

“That this House notes the findings of the Equality Trust that societies with smaller income differences between rich and poor have fewer health and social problems, such as teenage births, violence, mental illness and drug abuse; further notes that such societies have higher levels of trust between citizens and more social mobility; and therefore encourages the Government to promote policies that reduce income inequality.” Lire la suite…

Protesters in Tahrir Square in February this year

Hot on the heels of last month’s blog about a confidence crisis at the IMF, this month we bring you news of shaky knees at its sister institution, the World Bank, which – amid the cacophony of views about what exactly has triggered the revolutions of the “Arab Spring” – seems to be preparing to re-cast its role in the region.

The spreading IFI confidence crisis

Evidence comes from discussions at a conference sponsored by the World Bank in Washington last month, addressing the organisation’s policy in the Middle East following recent upheavals in the region. In his opening remarks to the conference, the World Bank’s president, Robert Zoellick, described his organisation’s record in the region as “spotty”, and admitted that “like others, we…have much to learn”.[1] Lire la suite…

A headache for IMF chief, Dominique Strauss-Kahn

An article in The Guardian newspaper in January created a minor storm by highlighting an apparently extraordinary finding from a recent study by public health researchers in the UK and US: that countries receiving loans from the IMF spend just one cent in every dollar received in health aid on actually improving medical care for their populations.[1]

The response from the IMF has been predictably robust.[2] But elsewhere there are signs that a significant re-orientation of IMF policy is taking place, prompted by criticisms levelled against it in recent years, and a period of introspection on the organisation’s role in the financial crisis.

How are we to make sense of all this?

Lire la suite…

The European Parliament building in Brussels

Big news from the Robin Hood Tax campaign, which regularly visitors will know EG4H has been supporting for some time now. On Tuesday this week, MEPs in the European Parliament voted in favour of levying a Financial Transaction Tax (FTT) on banks across the European Union. The proposed tax would be levied at 0.05% on all financial transactions, raising around €200bn a year. Within the European Union, it is being driven by the French and German governments, and has strong support from Austria and Spain.[1]

Although the vote is non-binding, three things make this development particularly significant.

Lire la suite…

Finance Ministers and Central Bankers from the G20 nations are meeting in Paris  today and tomorrow, their focus ostensibly being to agree on actions to help rebalance the global economy. Recent events in the Eurozone are likely to be a major topic of discussion.

Followers of EG4H will recall that we have been lobbying G20 officials since the beginning of the financial crisis on a variety of issues including: the need for a more representation within the group for developing countries; and a concerted effort at fundamental reform of the global economic system to ensure a better deal for global health. Sadly, many of the concerns raised in an EG4H letter in 2009 remain just as salient today as they did two years ago.

Here’s a copy of the letter we have just sent to the G20 Finance Ministers in advance of the Paris meeting, reiterating our concerns. We’ll be campaigning hard on these issues in the run-up to the G20 Summit in Cannes later this year.

Lire la suite…