Speaking during the debate, the European Commission representative made a point we would all do well to take account of – that without a well-defined redistributive mechanism, the revenue generated could well end up in those few countries with large financial centres. I hope this will be noted back home, since we, as the largest financial centre in Europe, obviously have a special responsibility.
I am also pleased that the resolution urges the European Commission and Council of Ministers to look at how the tax could be used to finance development co-operation and help developing countries to combat climate change.
I also support the part of the resoluton which says that any tax on financial transactions must not harm the banking system’s ability to perform its vital role of financing real economy investments, and must not encourage the migration of capital. This is linked to the need to avoid negative repercussions on small businesses and individual investors, who surely must be protected from any adverse effects this tax could have on them.
In order to discourage excessive risk-taking by financial institutions and ensure that the financial industry pays for the damage caused by the financial crisis, the Parliament is asking for pans to be prepared for a global tax. Should a worldwide tax prove unachievable, the EU could consider the option of going it alone.
Parliament is further asking the European Commission to develop the transaction tax plan on a short timetable to be ready to present to the G20 in June. The timing is important as we must not lose the momentum already achieved to introduce this tax.
The Commission is also asked to assess how such a tax could help stabilise financial markets and prevent a similar crisis by targeting “undesirable” transactions. Such transactions would, in the first instance, be identified by the Commission. While preferring a global approach through the G20, the European Parliament also believes that the pros and cons of introducing a purely EU-wide tax should be weighed up.
In its reply to the debate in the European Parliament, the European Commission, who are in favour of the tax and actively considering regulating the financial industry by this means, said it believed the issue is best tackled at global level, since this is the only way to prevent capital flight.
All in all this is a well though out and comprehensive resolution and one which I was happy to vote for. It’s now up to us as MEPs to keep the momentum going and do all we can to ensure this resolution is put into practice.