Now it is time for the financial transaction tax

Date

16 Nov 2011

Sections

Euro & Finance

“Since the collapse of the Lehman Brothers we have been talking about introducing a financial transaction tax. However, talk is cheap when it comes to solving the problems of the financial markets and government debt”, said CESI President Peter Heesen on 14th November in Brussels. At its meeting today, the CESI Board made an urgent appeal to the national governments to finally introduce this tax at the European level. Earnings from this tax are to be used to reduce government debt. “In this way we can find a solution for two problems besetting us”, Heesen states. The Euro-debt crisis and its consequences for the public service sector in Europe were an important topic of the Board meeting.

“Europe’s future will be decided in the financial crisis”, presidents Fritz Neugebauer and Peter Heesen state. Worries about Italy show that there is not much more time to draw the right conclusions from the crisis. Neither a levered bailout package (EFSF) nor the planned permanent mechanism for the period after 2013 are sufficient to stabilise the currency union. “Effective financial markets regulation needs to finally be added to the decisions“, Heesen said. The steps that have been taken in the area of bank regulation up to now are far from sufficient.  “The shadow markets need to be brought out into the light of an independent European banking supervisory body. In addition, a financial transaction tax needs to be charged Europe-wide, which tempers irresponsible speculative hocus pocus as well as contributing to solving the debt problem“, the CESI President states. He declared that it was incomprehensible that financial transactions could not be taxed, given that any other type of business in daily life is subject to tax.

In many states in Europe, the situation of the public sector is dramatic. The austerity measures of many governments basically affect all employees, but particularly young people and employees in the public sector. In some countries, basic union rights have been virtually crushed. The infrastructure of the public sector is being jeopardised. The salary cuts for public sector staff are part of a vicious circle which needs to be broken. “Particularly in countries such as Greece, we need investments and reforms leading to effective financial management. Simply kicking people out onto the street does not help to bring in more tax revenue nor does it reduce government spending, but only creates massive social pressure and political instability”, Heesen and Neugebauer state. The CESI-Board unanimously resolved that the member organisations of CESI are to jointly advocate a European financial transaction tax. “We want it for the entire Euro zone, preferably for the entire EU, as a permanent stabilising instrument“, the presidents said, especially in view of rejections still being upheld, by the British among others. Moreover, the independent European trade unions demand the creation of an independent European rating agency.