Brussels, 21/09/2001 (Agence Europe) - Ahead of the ECOFIN Summit, a group of forty-odd MEPs and national deputies from the 15 EU Member States (mainly PES, GUE/NGL, Greens/EFA), including Harlem Désir (PES, France) and Glyn Ford (PES, UK), have signed a joint statement on the Tobin Tax in which they raise questions about what the fifteen Finance Ministers will decide "in their meetings behind closed doors". They ask whether the Council will decide to immobilise the proposal by sending it to the IMF, or conveniently share roles and hide behind the politicians that have already announced they would be opposing it.
The deputies suggest that the governments which have come out in favour of the idea behind the tax take the proposal to the Council with determination, and that the other governments reconsider their position and realise that in order not to upset the markets, they are in the process of isolating themselves from a growing number of citizens, elected representatives and government leaders both in Europe and world-wide. They noted that the Deputy Prime Minister of Sweden, Lena Hjelm-Wallen, the Finnish Foreign Minister, Erkki Tuomioja, the Indian Prime Minister, Atal Behari Vajpayee, and the President of Brazil, Enrique Cardoso, have all expressed public support for the Tobin Tax, while Lionel Jospin and Gerhard Schröder have expressed interest and sympathy. The deputies write that governments can no longer content themselves with making ambiguous statements, expressing support for the idea whilst putting the practical application of the Tax on the back burner in the name of international constraints.
To get round the problems that would be faced in actually implementing the Tax (currency movements moving to off-shore tax havens or the Tax being set at too low a level to deter large-scale speculation against a currency), they recommend that the EU examine options and accompanying measures such as the suggestion by a former IMF consultant, Professor Spahn, that the Tax be set at two levels, the classic very low Tobin Tax, on the one hand, with a fiscal redistribution effect; and a much higher level (40 to 50%) on the other that would apply whenever a currency's exchange rate fluctuated outside a certain range (monetary serpent style) and would freeze selling of the currency in question. This "short circuit" would head off the collapse of a currency in a wave of panic selling. The deputies reminded those who criticise the Tax that taxes are already levied on a number of the world's financial markets, particularly on stockmarkets: 0.2% in Singapore; 0.4% in Hong Kong; 0.0034% in the US; and 0.6% to 0.3% in France.