The news we have been reading on the Financial Transaction Tax (FTT) has changed radically in the past couple of weeks. The large sums of money spent on financial lobbying efforts to spread the word about the supposed negative impacts of the FTT were not sufficient to convince the European Parliament. Last Wednesday, Greek MEP Anni Podimata received strong support for her report on the FTT, with 522 votes in favour, 141 against, and 42 abstentions. This is a clear reflection of the fact that the 11 European states that want to introduce this tax are not prepared to have the initiative thwarted by pressure from the financial sector.
The 11 countries* that participated in the enhanced cooperation arrangement (ECA) on the FTT understand that the tax will have major benefits. On the one hand, it will help to put a stop to the worst kind of speculation—and its consequences—created by the financial sector—and on the other hand, it will bring in additional revenue of about 34 thousand million euro.
Despite this good news, however, it is still early to call victory. The spotlight now returns to the 11 member states participating in the ECA as they will have the final say on how the tax is designed and on what the money generated will be used for. Citizens' movements want the final plan to be as similar as possible to the original proposal presented by the European Commission and described in the Podimata Report: a levy of a mere 0.1% on shares and bonds and 0.01% on derivatives.
Much remains to be decided on how the money generated by the tax should be used, but time is of the essence as in theory the FTT will come into force in January 2014. In civil society associations, our expectations are that the money will be used to alleviate major problems that remain unresolved in both Europe and the world's poorer countries, such as inequality, poverty, climate change and HIV/AIDS. One of the proposals being considered in Spain is to allocate 5% of the revenue to health, particularly to fight AIDS, malaria and tuberculosis. This 5% would amount to approximately 250 million euro a year that Spain could use directly to help save millions of lives around the world and at the same time fulfil some of its promises in matters of global health.
*Spain, Portugal, France, Italy, Slovenia, Belgium, Germany, Austria, Slovakia, Greece and Estonia.