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BackA long and hard battle with constant ups and downs. Now the struggle seems slowly to pay off. First the European Commission was reluctant to present a proposal on the introduction of the Financial Transaction Tax (FTT). Following weeks of heavy barrage by trade unions and civil society with major involvement of the Austrian Federal Chamber of Labour (AK), the Austrian Federation of Trade Unions (ÖGB), national and European trade unions and their umbrella organisations as well as a broad coalition of civil society organisations, Barroso and Co. had to succumb and finally presented a plan for introducing the FTT. Then came – as was to be expected – the coalition of preventers from the Member States, led as usual by the British and their allies. However, this week the countries that are in favour of the FTT – among them Austria playing a crucial role – ran out of patience. They committed to introducing the FTT initially in their own countries. Hence, for now the blockers have reached a dead end.
Only this week, the German business newspaper “Handelsblatt” devoted a leading article to the alarming phenomenon of so-called “stock trading robots”. These are high-performance computers, which on the basis of complex mathematical algorithm are able to establish minimal price differences between investment products in milliseconds, which they turn into profits. Surveys indicate that in the US already circa 60 % of share trading is carried out on the basis of this so-called “high-frequency trading”, in Europe circa 40%. Computers trade with computers or, as the Handelsblatt hits the nail on the head, with this kind of Casino capitalism “one doesn’t even need a croupier”.
Risky excesses whose social benefit is zero. If one would now tax such transactions, which so far generously had been exempt from tax, whilst at the same time under the pretext of reducing national debt, Commission and Troika (IMF, ECB, Commission) expected employees and consumers to accept ever-increasing cuts into their hard-earned rights and ever-higher tax burdens and contributions - the instrument of even a minimum level of FTT (the Commission proposals assumes a maximum tax rate of 0.1 %!), such phantom transactions would be significantly less attractive. And the Member States could at last generate much needed tax revenues to absorb the worst social effects of the crisis, which was triggered by the financial industry.
However: anybody who had the chance of looking behind the scenes of the Brussels lobby jungle knows the power and the undemocratic influence of the financial industry. Even though banks and co. without batting an eyelid helped themselves to billions from the budgets of the Member States and thereby from the taxpayer's pocket for free to beautify their balance sheets, turned deep red due to trading with ‘toxic assets, it still does not occur to them to stay away from risky speculative transactions. They are still not prepared to accept the mini amount of the FTT, which compared to the bank rescue packages, seems almost ridiculous, without resistance. Their socially seriously damaged reputation does not appear to bother them.
Hence, they have started their well-oiled lobby machine to put up maximum resistance against the introduction of the FTT, similar to many other honest attempts of the European Commission and the European Parliament to get to grips with the so far completely uncontrolled financial markets.
It was up to the European Parliament to take the debate on the FTT forward. In spite of the initial resistance of Conservatives and Liberals (and of course to this day of the ECR European Conservatives and Reformists, a political group, which was mainly created by the British Conservative Tories leaving the faction of the EPP, and which made it its target to uncompromisingly defend the City of London, the largest financial centre in Europe) one succeeded last year in convincing a broad majority of MEPs to come out in favour of introducing the FTT. A significant share in this success was also due to an online campaign, which was supported by AK, ÖGB, ETUC and many other trade unions and NGOs. Within just a few weeks, European citizens sent over 500,000 emails to their elected representatives in the European Parliament and demanded the immediate introduction of the FTT in Europe.
The clear vote of the European Parliament also made the Commission rethink the issue. If the competent Tax Commissioner Algirdas Šemeta had initially presented himself as a stubborn opponent of the FTT, who even intended to ignore the declaration of will of the European Parliament publically, after a certain time one was able to recognise that Šemeta and Barroso had started a rethinking process. Finally the Commission put a proposal for a European FTT on the table at last.
However, only a proposal. Because the actual implementation is a decision, which can only be taken by the Member States. And they have to agree. Because the European Parliament has no say in the matter of tax issues. And the veto of only one Member State brings the entire process to a halt. And that there would be at least one country that would do whatever it takes to protect its financial industry was clear from the beginning. Great Britain and her allies could be relied upon.
However, should those countries that are convinced of the value of the FTT just accept to be taken hostage by opponents and the financial lobby? A (so far only used twice) provision in the European Treaties was able to come to the rescue: the so-called “enhanced cooperation”. Under certain circumstances this instrument enables a minimum of 9 Member States to assume the pioneering role within the 27 countries of the Union
Following long political negotiations, this week the time had finally come. When the Finance Ministers met at the beginning of the week, there were written agreements by just 7 Member States. However, during the meeting 4 other countries declared their intention to be part of the coalition of the willing when the FTT was introduced. Not bad: even if it had been politically desirable to have at least the 17 countries of the Eurozone on board. The 11 countries, which currently want to take part, represent circa 90 % of the economic power of the Eurozone, and that is considerable. Among them as a supporter of the FTT since the start of the whole debate: Austria and the Austrian social partners.
A long and hard battle fought by employees is now coming closer to a good end. The Commission must now signal its green light for the plan of the currently 11 countries; the “pioneers” have to agree the details and after that the European Finance Ministers have to give their formal agreement. There is a lot, which could go wrong until everything has been achieved. The level of the tax rate and the question, which speculative products will be subject to this tax, could still be diluted. And the financial lobby and its political supporters in some countries will have their torpedoes ready right to the end.
Hence it is all the more important that trade unions and labour representatives as well as all their allies in civil society and population do not relax their efforts now that they have reached the final straight. First steps to end Casino capitalism, which has long got out of hand, even if they initially still seem to be small, are what is needed now!
Risky excesses whose social benefit is zero. If one would now tax such transactions, which so far generously had been exempt from tax, whilst at the same time under the pretext of reducing national debt, Commission and Troika (IMF, ECB, Commission) expected employees and consumers to accept ever-increasing cuts into their hard-earned rights and ever-higher tax burdens and contributions - the instrument of even a minimum level of FTT (the Commission proposals assumes a maximum tax rate of 0.1 %!), such phantom transactions would be significantly less attractive. And the Member States could at last generate much needed tax revenues to absorb the worst social effects of the crisis, which was triggered by the financial industry.
However: anybody who had the chance of looking behind the scenes of the Brussels lobby jungle knows the power and the undemocratic influence of the financial industry. Even though banks and co. without batting an eyelid helped themselves to billions from the budgets of the Member States and thereby from the taxpayer's pocket for free to beautify their balance sheets, turned deep red due to trading with ‘toxic assets, it still does not occur to them to stay away from risky speculative transactions. They are still not prepared to accept the mini amount of the FTT, which compared to the bank rescue packages, seems almost ridiculous, without resistance. Their socially seriously damaged reputation does not appear to bother them.
Hence, they have started their well-oiled lobby machine to put up maximum resistance against the introduction of the FTT, similar to many other honest attempts of the European Commission and the European Parliament to get to grips with the so far completely uncontrolled financial markets.
It was up to the European Parliament to take the debate on the FTT forward. In spite of the initial resistance of Conservatives and Liberals (and of course to this day of the ECR European Conservatives and Reformists, a political group, which was mainly created by the British Conservative Tories leaving the faction of the EPP, and which made it its target to uncompromisingly defend the City of London, the largest financial centre in Europe) one succeeded last year in convincing a broad majority of MEPs to come out in favour of introducing the FTT. A significant share in this success was also due to an online campaign, which was supported by AK, ÖGB, ETUC and many other trade unions and NGOs. Within just a few weeks, European citizens sent over 500,000 emails to their elected representatives in the European Parliament and demanded the immediate introduction of the FTT in Europe.
The clear vote of the European Parliament also made the Commission rethink the issue. If the competent Tax Commissioner Algirdas Šemeta had initially presented himself as a stubborn opponent of the FTT, who even intended to ignore the declaration of will of the European Parliament publically, after a certain time one was able to recognise that Šemeta and Barroso had started a rethinking process. Finally the Commission put a proposal for a European FTT on the table at last.
However, only a proposal. Because the actual implementation is a decision, which can only be taken by the Member States. And they have to agree. Because the European Parliament has no say in the matter of tax issues. And the veto of only one Member State brings the entire process to a halt. And that there would be at least one country that would do whatever it takes to protect its financial industry was clear from the beginning. Great Britain and her allies could be relied upon.
However, should those countries that are convinced of the value of the FTT just accept to be taken hostage by opponents and the financial lobby? A (so far only used twice) provision in the European Treaties was able to come to the rescue: the so-called “enhanced cooperation”. Under certain circumstances this instrument enables a minimum of 9 Member States to assume the pioneering role within the 27 countries of the Union
Following long political negotiations, this week the time had finally come. When the Finance Ministers met at the beginning of the week, there were written agreements by just 7 Member States. However, during the meeting 4 other countries declared their intention to be part of the coalition of the willing when the FTT was introduced. Not bad: even if it had been politically desirable to have at least the 17 countries of the Eurozone on board. The 11 countries, which currently want to take part, represent circa 90 % of the economic power of the Eurozone, and that is considerable. Among them as a supporter of the FTT since the start of the whole debate: Austria and the Austrian social partners.
A long and hard battle fought by employees is now coming closer to a good end. The Commission must now signal its green light for the plan of the currently 11 countries; the “pioneers” have to agree the details and after that the European Finance Ministers have to give their formal agreement. There is a lot, which could go wrong until everything has been achieved. The level of the tax rate and the question, which speculative products will be subject to this tax, could still be diluted. And the financial lobby and its political supporters in some countries will have their torpedoes ready right to the end.
Hence it is all the more important that trade unions and labour representatives as well as all their allies in civil society and population do not relax their efforts now that they have reached the final straight. First steps to end Casino capitalism, which has long got out of hand, even if they initially still seem to be small, are what is needed now!