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Support an EU-wide financial transaction tax

The GMB is urging Conservative, Lib Dem, Scottish Nationalist and Plaid Cymru MEPs to support the introduction of an EU financial transaction tax (FTT) when the issue comes before European Parliament next month. Labour and Green MEPs are already strongly backing the proposal which will be voted on in the next Strasbourg plenary session on 7th-10th March 2011.

Paul Kenny, GMB General Secretary, in a letter sent today has urged MEPs to support amendments from the Socialist Group to a report from Parliament’s Economic and Monetary Affairs Committee on innovative financing to be debated during the plenary. These amendments call for a financial transaction tax to be implemented at European level.

The original report on innovative financing was drafted for the Parliament’s Economic and Monetary Affairs Committee by Greek Socialist MEP, Anni Podimata, and included the proposal for an EU-wide FTT. However, Conservative and LibDem MEPs on the Parliament’s Economic and Monetary Affairs Committee voted to remove the inclusion of the FTT from the text. This is in spite of the fact that the Lib Dem manifesto last year promised to:

Work with other countries to establish new sources of development financing, including bringing forward urgent proposals for a financial transaction tax.”

The Socialist Group have therefore decided to re-table the proposal for the plenary vote, meaning that the Parliament as a whole will have the final say on an EU-wide FTT. Both the centre-right EPP group and the Liberal group are split on the issue, so the Socialist group is optimistic that it will be carried.

Following the Parliament’s vote, the European Commission will publish an impact assessment on innovative financing. Socialist MEPs are calling on the Commission to consider the possibility of an FTT more seriously, rather than its preferred choice of a Financial Activities Tax which they criticise as being a softer option.

Paul Kenny says in his letter:

The introduction of an EU FTT would not only be revenue-raising, it would also curb speculative, “socially useless” activities and encourage long-term investment. Such a tax would change the financial system for the better and would demonstrate to citizens across Europe that politicians are taking steps to ensure that lessons are learnt from this crisis.

Ideally, we would all want to see a global level FTT, but if insufficient progress is made through the G20, the momentum should be galvanised by introducing the tax at EU level. As the biggest financial market in the world, it makes sense that the EU should lead the way as a pioneer by introducing an FTT.

Europe cannot afford to look back and see this as a missed opportunity to create a positive dynamic to Europe’s economy and sustainable development worldwide. There is strong and sound evidence that the implementation of an FTT is not dependent on a global agreement. A well-designed, low-level tax at EU level would avoid the creation of any risk in terms of competitiveness, and would not scare the financial markets out of Europe, as many opponents of the FTT try to claim.”

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