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The controversial discussion around the Tobin tax is developing dramatically. Being one of the main objectives of the anti-globalisation movement, the currency transaction tax has finally been put on the european and german political agenda:
Speaking at the 5th International Economic Conference in Berlin on September 4th, a Social Democratic Party event, Schrí¶der said he was aware of the "weak spots in the international financial system, such as offshore centres, hedge funds and derivatives." With regard to the dangers arising from relatively autonomous speculative financial flows, Schrí¶der views the Tobin Tax as "one possible instrument" to foster financial stability. Furthermore, he acknowledged the anti-globalisation movement's concerns as being legitimate. His speech marks a surprising shift in the governments attitude towards a currency transaction tax.
Only last week, Alfred Tacke, secretary of the german Ministry of Economy, harshly rejected the idea of even discussing the Tobin tax issue. "Nobody in the industrialized countries wants a Tobin-Tax, the german government neither" The current discussion sends a „fatal signal" to the international financial system and might lead to grave consequences. Hans Eichel, minister of finance, rejects the Tobin tax because of practical problems with regard to implementation.
Finally Ernst Welteke, president of the Deutsche Bundesbank, argues that the Tobin tax would not only affect speculative financial flows. "Foreign trade in goods and services is bound to suffer as well." Therefore the positive effects of the tax would come at too high a cost.
However, Schrí¶der's speech seems to indicate a fundamental change in the german government's position. Schrí¶der said he was willing to discuss the matter with our "european partners, France in particular". As a result of this change of mind, the agenda for the informal summit of chancellor Schrí¶der, French Prime Minister Lionel Jospin and France's President Jaques Chirac last Wednesday was extended to include the Tobin tax issue. They agreed on installing a high-level working group to further discuss the matter.
Jospin had already shown his support for a tax on short-term currency transactions. Ignoring his finance minister's warnings that the tax was impractible he said that he was "in favour of France taking an initiative so that Europe endorses the Tobin tax". He also offered proposals to the upcoming meeting of EU finance ministers in Lií¨ge on the 22./23rd September.
Along with the Belgian EU presidency, the governments of France, Sweden and Finland have stated their support for a european initiative to impose the tax. Spain and Italy, on the other hand, confirmed their opposition.
Public support is apparantly gaining momentum. Yesterday, main representatives of the german civil society presented an "Open letter" to chancellor Schrí¶der, in which they call for the imposition of the Tobin Tax. The letter is signed by the biggest trade unions (IG Metall and Ver.di), attac and a bride range of NGO´s.
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