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BackTime and time again the phenomenon of Sunday soap box oratory appears at European level. European politicians support a certain issue in their home country, but when they have to nail their colours to the mast in Brussels, they often follow other interests and hope that nobody will notice. A prime example this week was delivered by members of the European Parliament. It concerned a very important subject: the European Financial Transaction Tax.
A tax, which for once does not affect the workers, but the speculators, the ones who caused the financial crisis. A tax, which Europe-wide swells the budgets by EUR 160 billion, urgently needed revenue at a time, when the Commission once again wants to force the Member States (at the expense of the workers) to impose restrictive austerity measures. A tax, which contributes significantly to put a damper on the frenzy of socially meaningless, computer-automated speculations. Sounds like a good idea? Well it is. But not everybody agrees.
At the height of the crisis, the secret political allies of industrial and financial interests had to hide their true colours. An open commitment to neoliberal ideas, which they had represented and implemented over decades no longer found favour with the electorate. After all the unrestrained excesses of the financial markets, who was still in the mood to hear about the “self-regulating forces” of the market? During this time it was also politically opportune to out oneself as an opponent of the speculation tax on financial transactions, demanded by labour representatives and renowned academics. After all, it was difficult to tell the electorate that banks and speculators should emerge unscathed from the crisis, which they themselves had caused.
As a result we were treated to a telling game of hide-and-seek with many facets. On the surface, the friends from industry and finance used fine speeches, interviews and talk shows to pay pithy lip service to the effect that speculators should be made to pay up. The Financial Transaction Tax (FTT) would be a good idea whose time had come. However, behind the scenes the lobby armies of the financial industry are already preparing the smoke screens. This concerns a business worth trillions; after all, currently about 2/3 of the entire speculative trade is carried out in a high frequency automated trading environment. Even a ridiculously low tax between 0.01 and 0.05 %, as demanded by supporters of the FTT, would cost speculation profits worth billions. Obviously the financial industry cannot take this lying down.
Hence, the financial wizards pulled a new argument out of their hats. The speculation tax was good, but it had to be implemented globally. If Europe would go it alone, the business would migrate to other parts of the world. However, so far there has been no proof of this claim. The European Commission adopted the argument of the financial lobbies and promised to campaign for the global implementation of the FTT. Although this might sound good, it is not. The Europeans know from countless negotiations with global partners that neither the USA nor Canada or China, to mention just a few of the major international economic players, are interested in implementing a FTT on a global scale. The opposition of their respective financial lobbies is simply too strong. Hence, a global FTT will remain a pipedream. A fact that has not escaped the Sunday soapbox orators in Europe.
That the European Commission would take part in this game of hide-and-seek was already suspected by workers. However, that the directly elected MEPs would follow the arguments of the financial industry came as a great surprise in Brussels this week.
A surprise because the MEPs only 4 months before had unanimously supported the idea that Europe would go it alone with regard to the FTT, if worldwide agreement could not be reached. Paragraph 63 of the report of French MEP Pervenche Berès quotes: “[the EP] favours the introduction of a tax on financial transactions, …; considers that such a tax ought to be as broadly based as possible or, failing that, that the financial transaction tax should be introduced as a first step at EU level”. With 33 votes in favour and only 2 votes against, this decision was practically unanimously approved in the competent parliamentary committee. And in the following vote in the plenum of the EP, 501 MEPs voted for and only 67 against the decision.
This was in stark contrast to the behaviour of the MEPs on Tuesday this week in the Committee on Economic and Monetary Affairs. Here the MEPs voted on the report of the Greek MEP Anni Podimata. Prior to the vote, the leaders of the most important political parties, European People’s Party, Social Democrats, Liberals and Greens, agreed on a compromise text, which word for word repeated the decision by the Parliament from the previous year: “[the EP] considers that such a tax ought to be as broadly based as possible or, failing that, that the financial transaction tax should be introduced as a first step at EU level”. It is normally common practice in Parliament that MEPs keep to such agreements - otherwise why would one make them in the first place?
However, during the vote, the trusting supporters of a European FTT were taken by surprise by the Liberals and the EPP. And that is how it was done: the Liberal market hardliner Olle Schmidt started the proceedings and brought forward the surprise motion to vote separately on the entire passage. This resulted in the fact that the sentence “[the EP] considers that such a tax [ought to be] as broadly based as possible” was adopted with a large majority in accordance with the compromise between the parties. However, when it came to the second and decisive part “or, failing that, that the financial transaction tax should be introduced as a first step at EU level”, hence the demand on Europe to go it alone, the alliance partners of EPP and Liberals broke their word and the motion failed to find majority support (21 to 21) and will therefore no longer be part of the report!
It must also be seen as failed strategy of the supporters of a FTT that they agreed to a secret ballot, in the false hope that some hardliner opponents of the FTT would change their mind, when the industry could not keep a close eye on them. In reality it happened the way it had to happen: wrapped in anonymity, the hardliners quietly threw out the FTT, without the public being able to hold them to account. However, there was one unplanned and tell-tale glitch during the vote. During the general pandemonium concerning the surprise conduct of the Liberals, the decisive passage had to be voted on several times, as the (not always sovereign) chair of the committee Sharon Bowles had initially miscounted. If the leader of the EPP, Jean-Paul Gauzès, had tried to avoid the usual hand signals of the party whip during the first ballot aimed at the other MEPs (thumb up: agree; thumb down: do not agree) to conceal the breach of promise of the Conservatives from the public, in view of the tight vote during the second vote he was not willing to take any risk. As a result we have the peculiar video proof that Gauzès uses the thumb down signal to encourage his colleagues to break the compromise they themselves had negotiated.
Why MEPs such as the French politician Jean-Paul Gauzès, the Pole Danuta Hübner, the Dutch Christian Democrat Corien Wortmann-Kool or the Liberal Swede Olle Schmidt, who only a few months before had voted in favour of a European FTT, have now suddenly made a 180 degree U-turn remains unclear. Obviously they and others have had convincing coaching by the financial industry.
The truth is that every game of hide-and-seek will come to an end. The report of Anni Podimata, which was voted on this week, has yet to be confirmed by the plenum of the European Parliament in March. The workers and their representatives as well as their allies from civil society will watch like hawks how each individual MEP conducts him or herself during the vote. The time of Sunday soapbox speeches is over.
At the height of the crisis, the secret political allies of industrial and financial interests had to hide their true colours. An open commitment to neoliberal ideas, which they had represented and implemented over decades no longer found favour with the electorate. After all the unrestrained excesses of the financial markets, who was still in the mood to hear about the “self-regulating forces” of the market? During this time it was also politically opportune to out oneself as an opponent of the speculation tax on financial transactions, demanded by labour representatives and renowned academics. After all, it was difficult to tell the electorate that banks and speculators should emerge unscathed from the crisis, which they themselves had caused.
As a result we were treated to a telling game of hide-and-seek with many facets. On the surface, the friends from industry and finance used fine speeches, interviews and talk shows to pay pithy lip service to the effect that speculators should be made to pay up. The Financial Transaction Tax (FTT) would be a good idea whose time had come. However, behind the scenes the lobby armies of the financial industry are already preparing the smoke screens. This concerns a business worth trillions; after all, currently about 2/3 of the entire speculative trade is carried out in a high frequency automated trading environment. Even a ridiculously low tax between 0.01 and 0.05 %, as demanded by supporters of the FTT, would cost speculation profits worth billions. Obviously the financial industry cannot take this lying down.
Hence, the financial wizards pulled a new argument out of their hats. The speculation tax was good, but it had to be implemented globally. If Europe would go it alone, the business would migrate to other parts of the world. However, so far there has been no proof of this claim. The European Commission adopted the argument of the financial lobbies and promised to campaign for the global implementation of the FTT. Although this might sound good, it is not. The Europeans know from countless negotiations with global partners that neither the USA nor Canada or China, to mention just a few of the major international economic players, are interested in implementing a FTT on a global scale. The opposition of their respective financial lobbies is simply too strong. Hence, a global FTT will remain a pipedream. A fact that has not escaped the Sunday soapbox orators in Europe.
That the European Commission would take part in this game of hide-and-seek was already suspected by workers. However, that the directly elected MEPs would follow the arguments of the financial industry came as a great surprise in Brussels this week.
A surprise because the MEPs only 4 months before had unanimously supported the idea that Europe would go it alone with regard to the FTT, if worldwide agreement could not be reached. Paragraph 63 of the report of French MEP Pervenche Berès quotes: “[the EP] favours the introduction of a tax on financial transactions, …; considers that such a tax ought to be as broadly based as possible or, failing that, that the financial transaction tax should be introduced as a first step at EU level”. With 33 votes in favour and only 2 votes against, this decision was practically unanimously approved in the competent parliamentary committee. And in the following vote in the plenum of the EP, 501 MEPs voted for and only 67 against the decision.
This was in stark contrast to the behaviour of the MEPs on Tuesday this week in the Committee on Economic and Monetary Affairs. Here the MEPs voted on the report of the Greek MEP Anni Podimata. Prior to the vote, the leaders of the most important political parties, European People’s Party, Social Democrats, Liberals and Greens, agreed on a compromise text, which word for word repeated the decision by the Parliament from the previous year: “[the EP] considers that such a tax ought to be as broadly based as possible or, failing that, that the financial transaction tax should be introduced as a first step at EU level”. It is normally common practice in Parliament that MEPs keep to such agreements - otherwise why would one make them in the first place?
However, during the vote, the trusting supporters of a European FTT were taken by surprise by the Liberals and the EPP. And that is how it was done: the Liberal market hardliner Olle Schmidt started the proceedings and brought forward the surprise motion to vote separately on the entire passage. This resulted in the fact that the sentence “[the EP] considers that such a tax [ought to be] as broadly based as possible” was adopted with a large majority in accordance with the compromise between the parties. However, when it came to the second and decisive part “or, failing that, that the financial transaction tax should be introduced as a first step at EU level”, hence the demand on Europe to go it alone, the alliance partners of EPP and Liberals broke their word and the motion failed to find majority support (21 to 21) and will therefore no longer be part of the report!
It must also be seen as failed strategy of the supporters of a FTT that they agreed to a secret ballot, in the false hope that some hardliner opponents of the FTT would change their mind, when the industry could not keep a close eye on them. In reality it happened the way it had to happen: wrapped in anonymity, the hardliners quietly threw out the FTT, without the public being able to hold them to account. However, there was one unplanned and tell-tale glitch during the vote. During the general pandemonium concerning the surprise conduct of the Liberals, the decisive passage had to be voted on several times, as the (not always sovereign) chair of the committee Sharon Bowles had initially miscounted. If the leader of the EPP, Jean-Paul Gauzès, had tried to avoid the usual hand signals of the party whip during the first ballot aimed at the other MEPs (thumb up: agree; thumb down: do not agree) to conceal the breach of promise of the Conservatives from the public, in view of the tight vote during the second vote he was not willing to take any risk. As a result we have the peculiar video proof that Gauzès uses the thumb down signal to encourage his colleagues to break the compromise they themselves had negotiated.
Why MEPs such as the French politician Jean-Paul Gauzès, the Pole Danuta Hübner, the Dutch Christian Democrat Corien Wortmann-Kool or the Liberal Swede Olle Schmidt, who only a few months before had voted in favour of a European FTT, have now suddenly made a 180 degree U-turn remains unclear. Obviously they and others have had convincing coaching by the financial industry.
The truth is that every game of hide-and-seek will come to an end. The report of Anni Podimata, which was voted on this week, has yet to be confirmed by the plenum of the European Parliament in March. The workers and their representatives as well as their allies from civil society will watch like hawks how each individual MEP conducts him or herself during the vote. The time of Sunday soapbox speeches is over.