Hollande and Merkel miss opportunity on Robin Hood tax, need to rethink path

Today France and Germany’s leaders met in Paris to set out their joint vision for the Financial Transaction Tax (FTT) that 11 EU countries agreed to implement later this year.

French President François Hollande and German Chancellor Angela Merkel failed, however, to discuss where the revenues of the tax would be spent and did not indicate support of including derivatives within the FTT. If derivatives transactions were excluded, the potential revenues of the tax would decrease by at least €21 billion per year, two-thirds of its expected revenue.

Alexandre Naulot, Oxfam’s spokesperson, said:

“Millions of people are still suffering from the financial crisis. They could have expected some help from Hollande and Merkel today. But instead there is just more disappointment. The high hopes we had for a strong commitment to a broad-based financial transacton tax to raise money for people and the planet have been dashed.”

“The only people happy today about how Merkel and Hollande ducked the crucial discussions on allocation and derivative transactions are the bankers and financial traders.

“With less than 100 days before the European elections, France and Germany must now rethink their path from here and work with their European partners to ensure that the Robin Hood Tax is something to be proud of, rather than becoming a shadow of something that could have genuinely helped alleviate poverty for millions.”

Notes to Editors:

*** Expectations for progress on finer details of the EU-11 FTT were high for today’s high-profile meeting. Amongst those calling for an ambitious accord between France and Germany were 300 NGOs, a number of French and German MEPs, joined by young socialists, and leading economists.  

*** Read the Robin Hood tax media brief (Feb 2014), which includes facts and figures about why taxing derivatives is so important and what could an FTT pay for in terms of development and climate change.

*** Independent financial research company Alpha Value showed, in a recent report, that the derivatives markets are already sky-rocketing above pre-crisis levels. Moreover, the German and French banks, Deutsche Bank and BNP Paribas, are ranked the top two European banks for speculating on derivatives. For instance: BNP Paribas held €48.3 trillion in such derivatives in 2013, equivalent to more than 24 times France's GDP; Deutsche Bank held €55.6 trillion in such derivatives in 2013, equivalent to more than 22 times Germany's GDP.

*** The 11 EU participating countries are: Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain.