Thursday, August 27, 2009

New tax might come up during G-20 meetings

Momentum is growing on establishing a new tax on global financial transactions. The pressure will be great with the upcoming G-20 meetings. Finance ministers for the 20 countries meet in London later this week, and the heads of the states meet in a few weeks in Pittsburgh.

From this Guardian story, writer Nick Mathiason tells us more about the tax and why the pressure is accumulating now.

G-20 Finance ministers meeting in London next Friday will face concerted pressure to introduce a tax on financial transactions as a coalition of anti-poverty campaigners aim to force the issue onto the agenda.

An unprecedented coalition of health charities and development campaigners will ratchet up pressure on the G20 in the wake of comments made todayby Financial Services Authority chairman, Lord Turner supporting a Tobin-style tax on foreign exchange transactions.

Pressure on the G20 grew as senior officials at the United Nations also threw their weight behind a currency transactions levy. Philippe Douste-Blazy, the former French foreign minister now the UN's secretary-general's special adviser on innovative financing for development, told the Guardian: "I hope one head of state will propose this tax. I don't know who it will be. I think it's a good idea for two reasons.

"Firstly, this economic crisis is going to have serious consequences on developing countries. The price of commodities will fall because investment from western countries will decrease and aid commitments will not come through. And second, this is a crisis of ethics, a problem of cynicism with the system. We can't continue like this. We have to redefine the system."

His intervention is crucial because he was the architect of a groundbreaking tax in France that skims a tiny sum from airline ticket sales to buy cheap medicines for those suffering from Aids, malaria or tuberculosis. The scheme now extends to 30 countries with more set to follow. In two years it has raised $1bn.

Next week's G20 finance meeting will be followed by a co-ordinated push by campaigners to persuade leaders of the world's 20 most powerful countries meeting at Pittsburgh in four weeks to adopt a currency transaction levy.

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