Update on substantial progress (and the risk the money raised won’t go to development and climate change) from Oxfam head of advocacy (and generally merry man) Max Lawson
This week sees a Global Week of Action for the campaign for the Robin Hood Tax (aka the Financial Transactions Tax, or FTT). The FTT rose to prominence as a result of the financial crisis, which continues to keep it in the spotlight as Greece stumbles towards the euro exit, not least because journalists are desperate for fresh ways to report a crisis that is simultaneously huge news and desperately dull. So from Cape Town to Paris, campaigners are pulling on their green tights and fat cat costumes, starting with a wedding in Berlin for Francois Hollande and Angela Merkel (right).
In policy land, a revised impact assessment of the FTT by the European Commission was obtained by the Guardian. The new assessment shows that the EC got its numbers wrong in a previous study that was seized upon by the FTT’s opponents. Recognizing that the majority of small and medium size firms do not rely on financial markets for investment (and so their access to capital would be unaffected by an FTT) reduces the cost to growth of an FTT to a tiny 0.2% reduction on a total predicted growth of about 80% between now and 2050. Moreover, if the revenues from an FTT (€57 billion a year according to the EC) are invested in creating jobs, then this tiny negative then becomes positive so that an FTT would actually boost growth in Europe. Got that? An FTT is pro-growth. Alas, such positive conclusions are unlikely to make it into any speeches by David Cameron or the front page of the Financial Times.
The pressure on EU leaders is extreme. The political debate is shifting from austerity to growth, with Angela Merkel faring poorly in some major state elections, and the victory of the socialist party in France. Monsieur Hollande has highlighted the FTT as one of the three main ways to boost growth in Europe. The FTT is going to figure highly in the EU leaders’ ‘Growth Summit’ on 22nd May. The Wall Street Journal made the link last week, saying that ‘even if they are calling for an FTT, at least the left are talking growth’.
With millions across Europe facing unemployment and serious suffering, especially in Greece, it is great to finally hear leaders speaking out against the death spiral of austerity and recession. It is also great that the FTT is one of the key things being cited to help with this. The Robin Hood Tax has always been about helping the poorest in developed nations as well as helping finance the fight against climate change and poverty in developing countries. If the proceeds of a tax on the unproductive and destabilising casino behaviour of the financial markets is used in part to create jobs and protect public services in Europe this would be a great redistribution and a great thing.
But this is also the biggest threat. With global aid levels falling, and the Green Climate Fund sitting empty, revenues from the FTT are vital for global, as well as domestic causes. Before the election, Francois Hollande said publicly he would favour up to 30% being used in this way, but he has been ominously silent since. Just last week in a closed door meeting with the heads of major NGOs, Chancellor Merkel reiterated her support for doing this. But the exigencies of austerity and the European crisis make this far from certain. Green groups in particular need to pile the pressure on France and Germany, ahead of next month’s Mexico G20 and Rio Earth Summit.
I was in South Africa last week for meetings with civil society and government G20 negotiators. South Africa has a strong interest in a successful Green Climate Fund. They agreed to speak to Brazil and Argentina as the three countries outside Europe that joined the FTT ‘coalition of the willing’ at the G20 in Cannes, focusing on supporting an FTT for funding development and climate change. Pressure on France and Germany from these governments will be critical.
In the US, the G8 is taking place today, and President Hollande has promised to raise the FTT in discussions with fellow G8 leaders. The Robin Hood Tax USA campaign is also being launched, by thousands of nurses dressed as Robin Hood, marching in Chicago. Interviewed on US news recently, the head of the US National Nurses Union was asked by the presenter whether she was serious; she replied ‘we are as serious as a heart attack’.