Friday, 18 May 2012

Time for a Euro-zone FTT is NOW!

The deepening financial/sovereign debt crisis in a number of Euro-zone countries now poses a real threat to economic recovery and social stability across the entire EU region and beyond. This issue will be the key subject of discussion at the meeting of G8 leaders in Camp David over the next two days where President Obama will later today urge Germany to ease the pain of austerity with policies to boost growth to prevent a second global recession in four years.

However, focussing the discussion on growth versus austerity alone exposes the poverty of imagination by which policy makers are approaching what is essentially a crisis of confidence in the deregulated market system. This system promised to deliver the good life to the citizens of Europe but after several decades of growth, there is now greater poverty and inequality between the member states of the EU as well as within most of these countries than there was twenty years ago.
This reveals the deeper moral dilemma posed by the market system which asks us to think of ourselves as autonomous individuals and consumers as opposed to inter-dependent human beings with inextricable links to the rest of creation. It also privileges the movement of capital and financial transactions over the well-being and flourishing of people rooted in communities which led directly to the 2008 financial crisis and ensuing global economic recession. The sovereign debt crisis now threatening the continued existence of the EU is simply another manifestation of this moral crisis.

Expansionary policies to facilitate growth will not therefore be enough to pacify the markets at this late stage and will certainly not address the underlying moral dilemma of the market system. This will require much more creative and innovative thinking in the medium and longer term and southern EU countries will require strategic investment accompanied by structural reforms to reverse current trends. Member states of the Euro-zone will also need to decide on the moral purpose of the market as they consider the bigger issue of fiscal and political union to give credibility to their common currency.
However, an urgent short term solution is needed to prevent the implosion of the EU and the proposal for a Euro-zone FTT or Robin Hood Tax as the campaign is known in the UK can provide an intermediate moral solution – see . This campaign has gained wide support from supporters across the world in the past two years including Archbishops Desmond Tutu and Rowan Williams, Nobel Prize winners Joseph Stiglitz and Paul Krugman, Earth Institute Director Jeffrey Sachs and 1,000 other economists from around the world. Following the significant progress seen under the French Presidency of the G8 and G20 last year, Germany, France, Spain, Brazil, Argentina, South Africa, Ethiopia and the African Union all pledged their support for a Robin Hood Tax.

In the UK, thousands of people have been campaigning and lobbying MPs to introduce a FTT to help those hardest hit by the financial crisis and good causes overseas. The First Ministers of Scotland and Wales have both voiced their support for the tax, along with a number of Westminster MPs. Thanks to huge public support, bank taxes have been pushed onto the political agenda, and keeping the pressure up is the most important thing we can do right now. Robin Hood Tax supporters in England, Wales and Scotland have already been taking action this week to show their support for this tiny tax that could make a huge difference to people’s lives all over the world.
As an economic storm once again threatens to engulf the world economy, all eyes will be on world leaders to fix the system at the upcoming G8, G20 and Rio Summits; by curbing casino capitalism, Robin Hood taxes will help do that, in addition to raising tens of billions to help the world's poorest people.

This is an idea whose time has come and that time for the Euro-zone is NOW!