Financial Transactions Tax: the time has come

, by Social Watch

The idea of taxing international financial transactions is gaining ground. The European Union is promoting it internationally and studying the possibility of imposing it throughout the bloc, or at least in the euro area.

But it is still not clear what the scope of the tax would be or what the funds generated would be used for. They could go to mitigate the effects of the crisis in the industrialised North or, as was originally proposed, to help the countries of the South develop and fight poverty.

The initiative to create a Financial Transactions Tax (FTT) has resurfaced today, forty years after the United States economist James Tobin suggested levying a very small tax on currency transactions with the aim of stabilising exchange rates, and fifteen years after civil society organizations took up the idea with some variations, such as to use the money to eradicate poverty worldwide.

A more recent expression in support of the idea came from the joint meeting of the World Bank and the International Monetary Fund (IMF), held from the 23 to 25 of September in Washington. There was a statement in favour of creating such a tax and using the proceeds to foster the development of the World Francophone Organization, which is made up of 49 countries that between them have one tenth of the world’s population, including many developing countries from all the continents. Germany, France and other members of the EU reaffirmed their support for the initiative.

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