In a month in which Gordon Brown and Nicolas Sarkozy published a joint editorial in the Wall Street Journal singing the praises of a Financial Transaction Tax (FTT) we reflect on a month that has brought our issue into the mainstream.
Their joint article is a clear sign that Europe is uniting behind the FTT - this was set in stone later in the week as all 27 EU members issued a joint statement pressing the IMF to consider an FTT in their report to the G20.
Yet by choosing to publish it in the Wall Street Journal it was also an attempt to persuade American public opinion of the FTT's merits.
The day after the joint editorial was published, Gordon Brown appeared on Newsnight, echoing his and Sarkozy’s words that: “there is an urgent need for a new compact between global banks and the society they serve: A compact that ensures the benefits of good economic times flow not just to bankers but to the people they serve.”
This is a position we at Stamp Out Poverty have long held, but what made Europe’s leaders change their minds? The crisis has left three gigantic policy conundrums on their desks:
• The financial sector has inflated beyond any reasonable limits (almost 75 times the size of world GDP)
• Domestic fiscal deficit has soared thanks to the billions in bailout money
• Commitments to international development and climate change are unravelling at the very time they are needed most.
An FTT is capable of directly addressing all three of these, and for this reason it has become one of the most important policy debates taking place in the international arena in recent months.
During the UN’s Copenhagen climate summit Gordon Brown again called for innovative finance mechanisms to provide the additional money we need to pay for the worst effects of climate change.
The call for a tax on financial transactions to be global is understandable: this would both yield the most money and tackle a global issue on a global level. But our sincere concern is that without international consensus, these grand words will be empty.
We call on Gordon Brown to continue his lead role in ensuring something positive comes from the financial crisis. We ask that the British government unilaterally announce a Currency Transaction Levy at the next Budget, as a stepping stone to a broader international FTT. This would provide a clear signal that real change is possible.
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