The Europeans For Financial Reform (EFFR) coalition* urges G-20 leaders to make concrete progress towards the introduction of an internationally coordinated financial transactions tax (FTT) at the G20 summit in Seoul.

The Europeans For Financial Reform (EFFR) coalition* urges G-20 leaders to make concrete progress towards the introduction of an internationally coordinated financial transactions tax (FTT) at the G20 summit in Seoul.

The EFFR coalition urges G-20 leaders to make full use of the potential of an FTT by pushing this instrument at G-20 level. “The crisis isn’t over for everybody. As the banking sector picks up, unemployment is still high and the prospect of anemic growth will further hamper the job market. Many leaders have stated their support for a FTT at global level. But, calling for a global FTT must not become the opportunity to push for a watered down FTT and fail to make real use of this fiscal tool”, said John Monks, General Secretary of the European Trade Union Confederation.

The EFFR coalition calls on the G-20 to act, especially since evidence for the feasibility of an FTT is mounting: “This proposal for an FTT is not just wishful thinking, but a feasible initiative backed by experts. The recent International Monetary Fund (IMF) paper1 has pointed out that most G-20 countries have already implemented some form of transaction tax, so the only thing that is really needed now is the political will to harmonise them. The paper also confirmed that an FTT can generate substantial revenues, which are especially necessary for investment in social infrastructure”, said Conny Reuter, Secretary General of SOLIDAR.

The Coalition calls on G-20 leaders to take on the FTT as a component of the regulation of the financial markets. “A FTT properly designed to its effectiveness and administrability is also a means for regulation. The combination of a very wide tax base and a rate of 0.05% would ensure huge amounts of revenue and have a significant effect on speculative short-termism, notably by eliminating the systemic risks associated with high-frequency computerized trading that increasingly predominates in financial markets”, said Philippe Lamberts, Member of the European Parliament and co-spokesman of the European Green Party.

“We need a financial transaction tax as an alternative to austerity measures, to boost investment and ensure a transition towards more sustainable and equitable patterns of production and consumption. The IMF latest publication points out the risks of excessive budgetary contraction. A FTT would ensure huge amounts of revenue for jobs and growth, public services and education, development and fighting climate change” said Poul Nyrup Rasmussen, President of the Party of European Socialists.

*The EFFR coalition brings together progressive organisations such as Trade Unions (ETUC, DGB, FGTB-ABVV, EPSU, …), NGOs (SOLIDAR, Global Progressive Forum, CNCD-11.11.11, …), Think tanks (FEPS, Cevea, …) as well as progressive political parties (PES, S&D Group in the European Parliament, European Greens and Greens/EFA Group in the European Parliament) from all over Europe.

It was launched in September 2009 to give progressive answers to the financial crisis. See website in English, French, German and Spanish: www.europeansforfinancialrefom.org

1 “Taxing financial issues: issues and evidence” (IMF working paper, August 2010)