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BackThe European Commission continues its strategy of mini steps. Timid and slow progress in regulating the financial markets. To add insult to injury it has now even been planned to quietly bury the Financial Transaction Tax and to replace it by a poor imitation, which is cheaper for the banks. The objective: pulling the wool over the eyes of employees and taxpayers and letting the banks off the hook.
This week, Algirdas Šemeta, the Lithuanian Commissioner for Taxation, introduced a Communication of the European Commission on "Taxation of the Financial Sector" in Brussels. Faced with growing political pressure and the fury of employees, the Commission was no longer able to ignore the subject.
For months now, a growing coalition of progressive forces, among them the Austrian Federal Chamber of Labour (AK) and the Austrian Trade Union Federation (ÖGB) have pushed for the introduction of the Financial Transaction Tax (FTT). The Austrian Federal Government is also actively supporting this demand. But the resistance of the financial lobbies is strong and they have supporters in some governments and the Commission.
After a long period of hesitating and dithering and only after the demand of the heads of state and government and the European Parliament, the Commission has now published a Communication as to how it envisages the taxation of the financial sector. It is a fact that the bill for the immense human and material damage, which the deregulated speculators from the financial world have caused, has so far exclusively been footed by the citizens. Those, who have triggered the crisis and are once again making maximum profits, want to continue as before and don't want to be disturbed. They are supported by an army of mercenaries, the lobbyists.
Under these circumstances one might have expected a clear commitment of the Commission with regard to the FTT. Far from it. After the Europeans had already been shown the cold shoulder at international level concerning their half-hearted demand for a global FTT, the Commission has now turned its back on the introduction of the FTT within the EU. The prevailing argument is that the financial trade might desert Europe. However, so far the Commission has failed in providing proofs for this horror scenario, which the banks always like to put forward.
Instead, the Commission proposes a "tax" on financial activities. Sounds similar and the citizens will probably not spot the difference. The fly in the ointment: whilst the FTT would generate an annual volume of EUR 150 billion for the EU countries, the so-called Financial Activity Tax would at best generate EUR 25 billion, more realistically probably just EUR 5 billion. A bargain for the banks! The concept of the Financial Activity Tax is an invention of the International Monetary Fund from June 2010; almost no real experiences have been made with the tax. And whilst the FTT, apart from the higher income, would also have had the immense advantage to slow down the frenetic fully computer-based high speed trade with securities, the Financial Activity Tax has no steering effect worth mentioning.
It is high time that the employees and the civil society Commission, financial lobbies and those Member States, which want to turn the EU into a financial market, remind themselves that democracy and social peace are commodities worth preserving.
For months now, a growing coalition of progressive forces, among them the Austrian Federal Chamber of Labour (AK) and the Austrian Trade Union Federation (ÖGB) have pushed for the introduction of the Financial Transaction Tax (FTT). The Austrian Federal Government is also actively supporting this demand. But the resistance of the financial lobbies is strong and they have supporters in some governments and the Commission.
After a long period of hesitating and dithering and only after the demand of the heads of state and government and the European Parliament, the Commission has now published a Communication as to how it envisages the taxation of the financial sector. It is a fact that the bill for the immense human and material damage, which the deregulated speculators from the financial world have caused, has so far exclusively been footed by the citizens. Those, who have triggered the crisis and are once again making maximum profits, want to continue as before and don't want to be disturbed. They are supported by an army of mercenaries, the lobbyists.
Under these circumstances one might have expected a clear commitment of the Commission with regard to the FTT. Far from it. After the Europeans had already been shown the cold shoulder at international level concerning their half-hearted demand for a global FTT, the Commission has now turned its back on the introduction of the FTT within the EU. The prevailing argument is that the financial trade might desert Europe. However, so far the Commission has failed in providing proofs for this horror scenario, which the banks always like to put forward.
Instead, the Commission proposes a "tax" on financial activities. Sounds similar and the citizens will probably not spot the difference. The fly in the ointment: whilst the FTT would generate an annual volume of EUR 150 billion for the EU countries, the so-called Financial Activity Tax would at best generate EUR 25 billion, more realistically probably just EUR 5 billion. A bargain for the banks! The concept of the Financial Activity Tax is an invention of the International Monetary Fund from June 2010; almost no real experiences have been made with the tax. And whilst the FTT, apart from the higher income, would also have had the immense advantage to slow down the frenetic fully computer-based high speed trade with securities, the Financial Activity Tax has no steering effect worth mentioning.
It is high time that the employees and the civil society Commission, financial lobbies and those Member States, which want to turn the EU into a financial market, remind themselves that democracy and social peace are commodities worth preserving.
Further information:
Communication from the Commission