Over 50 leading financiers have expressed their support for a European Financial Transaction Tax (FTT) ahead of a meeting of Finance Ministers in Brussels next week. In an open letter to European leaders, the financiers argue the FTT will reduce financial instability and raise significant additional government revenue.
Finance Ministers from ten European countries including France, Germany, Italy, Belgium, and Spain, are expected to discuss the FTT at a meeting in Brussels on Monday 10 July. They are nearing agreement on the FTT after years of negotiations.
52 senior figures in the global finance industry signed the letter including Lord Adair Turner, Former Chairman of the UK Financial Services Authority (UK); Avinash Persaud, Chairman, Intelligence Capital Limited and former head of Currency and Commodity Research, JP Morgan (UK); Dr William Barclay, former Senior Vice President, Planning and Development, Chicago Stock Exchange (US); Luc Bomans, former Executive Vice President, JP Morgan, and former CEO, Euroclear Securities Clearing System (Belgium); Dirk Müller, Financial Expert and Former Broker, Frankfurt (Germany); Jean-Louis Bancel, President, Crédit Coopératif (France); Luca Mattiazzi, General Manager, Etica Sgr (Italy); and Andrew Sheng, Former Chairman, Securities and Futures Commission (Hong Kong).
Their letter calls for a modest tax on financial transactions, such as the purchase and sale of stocks and derivatives. The financiers argue the tax will help deter the sort of high-risk ultra-short term trades that led to the 2008 financial crash. They highlight that the ‘Robin Hood’ tax would raise significant new revenues, that could be used to invest in healthcare and education across Europe, as well as the fight against poverty and climate change around the world. It is estimated that the European FTT could raise €22 billion a year – more than the European Union spends supporting agriculture in France, Germany and Italy combined.
The letter cites a growing body of evidence that the FTT could boost economic growth and dismisses claims that the tax will make it harder for European countries to entice finance firms away from London following Brexit.
Avinash Persaud, Chairman, Intelligence Capital Limited and former head of Currency and Commodity Research, JP Morgan (UK), a signatory to the letter, said: “The financial industry’s arguments against a Financial Transaction Tax don’t stack up. The FTT won’t harm investment or economic growth – but it will reduce the kind of dangerous trading behaviour that caused the financial crisis of 2008.”
Max Lawson, head of policy on inequality for Oxfam and a spokesperson for the European Robin Hood Tax coalition, which coordinated the letter, said: “The message from Europe’s top financiers is clear – a financial transaction tax makes economic sense and should be delivered without delay.”
“Finance Ministers must set out a timetable for reaching a deal by the end of July. Every day of delay deprives Europe’s citizens of €60 million in lost revenues. There are no technical issues standing in the way of agreement – it is simply a matter of political will,” added Lawson.
The Robin Hood tax enjoys widespread support across Europe: 73 percent of people polled in France, and 61 percent in both Belgium and Slovenia support the tax. However, the financial industry has been furiously lobbying for governments to drop the initiative. A final decision on the tax has been postponed twice. Since the last time, a final agreement was put off in December 2016, €12 billion could have been raised to benefit people at home and abroad.
Several countries including the UK, South Africa, Hong Kong, Singapore, Switzerland and India have already implemented financial transaction taxes that raise billions of dollars in revenues every year.