Oxfam and CIDSE welcome EU FTT plan but the money must go to tackle poverty

The European Commission proposed today an EU-wide Financial Transaction Tax (FTT) to fund its next long-term budget (2014-2020) partly through own resources. International development NGOs Oxfam and CIDSE welcomed the Commission’s support for an FTT, but stressed the revenues should be used to tackle poverty and climate change.

Natalia Alonso, Oxfam International’s EU head of office, said:
“Today marks a real turning point. It’s great news that the Commission has joined the millions of ordinary Europeans who want the financial sector to contribute more to society. But this tax will only win popular support if the revenue is used to tackle poverty and climate change - not if it disappears into the general EU budget.”

Bernd Nilles, Secretary General of CIDSE, said:
"We are delighted the Commission has shown real leadership in adding to the growing political momentum for an FTT in Europe. An FTT could raise enough to repair the damage done by the economic crisis and discourage the casino capitalism that has grown out of proportion in the last two decades. An FTT can work for people and the planet. We now need firm legislative proposals on the table to get a European agreement."

Oxfam and CIDSE's benchmark will be whether any FTT agreed generates resources for tackling poverty and climate change, not which budget these are spent through. Resources could be delivered through a number of routes, ranging from the EU budget to member state budgets and other global funds.

At around €1 trillion the size of the draft budget for 2014-2020 remains similar to the 2007-2013 budget. However, the European Commission seeks to reduce the contribution by EU member states which struggle with the impacts of the economic and financial crisis. The Commission considers own resources the only alternative to national contributions, which lead to bitter negotiations over the EU budget.

Alongside an FTT, the Commission also proposed a new EU VAT resource (to replace the current VAT-based one) to raise its own resources for the 2014-2020 budget. More details: http://ec.europa.eu/commission_2010-2014/lewandowski/library/documents/pressConf_MFF_presentation_20110629_en.ppt

The announcement comes as a new Eurobarometer poll of more than 27,000 people shows Europeans are strongly in favor of a FTT (61%).  Of those, more than 80% agree that if global agreement can't be reached a FTT should initially be implemented in just the EU. http://www.europarl.europa.eu/parliament/public/staticDisplay.do?language=EN&id=40

Next steps:

Mid July: The Commission will present an impact assessment on financial sector taxes, which is likely to favor an FTT at the EU level. President Barroso, Taxation Commissioner Šemeta and Budget Commissioner Lewandowski now publicly support an FTT at EU level.

• Autumn: The Commission will put forward a legislative proposal on taxing the financial sector.
• 17-18th October: EU heads of state expected to discuss the EC proposal, ahead of the G20 summit inFrance.

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Oxfam is an international confederation of 15 organizations working together in 98 countries and with partners and allies around the world to find lasting solutions to poverty and injustice. www.oxfam.org

CIDSE is an international alliance of Catholic development agencies. Its 16 members share a common strategy in their efforts to eradicate poverty and establish global justice. www.cidse.org