Liège, 24/09/2001 (Agence Europe) - As a result of their packed agenda, and more importantly their reticence with regard to the Tobin Tax, at the ECOFIN Council in Liège on Saturday, the EU's Finance Ministers ended up sending the debate proposed by the Belgian Presidency on the volatility of capital and development aid to the background. The EU did, however, take a minimum amount of precautions to not completely bury the Tobin Tax by, for example, instructing the Economic and Financial Committee to outline terms of reference for the European Commission so that the it can prepare a report on globalisation issues. The guidelines will be examined by the next ECOFIN Council on 16 October and the report itself should be presented to the ECOFIN Council on 14 December.
At a press conference, the French Finance Minster, Laurent Fabius, said that the study would describe the positive aspects and the potential abuses of globalisation in order to be able to examine ways (including the famous Tobin Tax) of dealing with abuse, and defining ways of funding development. No link was made between a potential tax on capital speculation and the original idea of spending the income so raised on development aid.
The Belgian Presidency proposed guidelines to help the Commission draw up its report, but Ministers refused to accept them. As for the globalisation issues to be covered, the Presidency had proposed that the report be in four parts: "an analysis of the benefits of globalisation"; an" analysis of the impact of financial integration on volatility and the increase in the frequency of financial crises"; "assessment of the initiatives already launched by the international community to mitigate volatility in financial markets and reduce speculation"; "assessment of the initiatives launched by the international community to fight the potential drawbacks of globalisation". The report should propose additional initiatives related to the fight against the financing of terrorism. The Presidency recommends that the Commission "analyse the advantages and disadvantages of the creation of a tax on financial transactions, including an analysis of the Tobin Tax as well as alternative proposals pursuing the same endeavour". In terms of development issues, the Commission is invited to "address the proposals made by the Zedillo Report and other proposals" such as the "De-Tax" and the tax on arms exports (suggested by Mr Fabius); "look at ways of improving the effectiveness of European budget development aid as well as fulfilment of the 0.7% GDP overseas development aid objective" (only respected by Ireland, Luxembourg, Sweden and the Netherlands).
Mr Fabius acknowledged that many reservations had been expressed about levying even a small commission on transactions on the currency markets, saying that it was palpable that many colleagues objected to this. The idea that predominated, he added, was that whatever one's basic opinions might be, it is correct for such an objective study to be made. He said that the Presidency had simply wanted to put the issue on the table. The Luxembourg Prime Minister and Finance Minister, Jean-Claude Juncker, and the Dutch Finance Minster, Gerrit Zalm, both said that no Minister had supported the Tobin Tax. The Austrian Minister Karl-Heinz Grasser confirmed that there had been no signals in favour of a new, stricter tax against speculation, adding that in his view, it was simply a matter of supporting market forces since globalisation creates enormous growth potential. The German Minister, Hans Eichel, asserted that most of the Finance Ministers feel that the Tobin Tax is inopportune. His Irish counterpart Charlie McGreevy, said that the Ministers couldn't see how it could work. The Italian Finance Minister, Guilio Tremonti, strongly defended the idea of taking 1% of VAT receipts for funding development aid, as an alternative to the Tobin Tax. The EU's central bankers, who had been invited to take part in the debate, were mostly favourable to globalisation in terms of its positive effects on prosperity and the efficiency of the international economy, and paid great attention to ensuring that such advantages could be analysed in as much detail as possible in future studies, explained the President of the French Central Bank, Jean-Claude Trichet.
ATTAC announces campaign at Laeken
Disappointed, leaders of ATTAC at their conference in Liège pledged to step up their campaigning at the Laeken Brussels Summit in December. The President of ATTAC France, Bernard Cassen, said that it was correct for the European Commission to examine the impact of such an important new measures, but ATTAC had no confidence in the Commission's experts, wanting it to use independent experts.
Anti-globalisation protestors denied that the attacks in the US had changed the situation. The President of ATTAC Liège, Arnaud Zacharie, said the attacks had made ATTAC's ideas more relevant since rather than bombing Afghanistan - which would be a catastrophe - poverty and uncontrolled capital speculation had to be fought. An action is being planned in Luxembourg on 6 October against tax havens, and another in Europe against the WTO on 10 November.