Innovative financing at a global and European level (debate) 
President
The next item on the agenda is the report by Mrs Podimata, on behalf of the Committee on Economic and Monetary Affairs, on the report on innovative financing at global and European level.
Anni Podimata
Mr President, allow me, first of all, to thank the shadow rapporteurs, the secretariat of the Committee on Economic and Monetary Affairs and the chairs of the political groups for their constructive contribution to the debates and the efforts made to reach agreement on this very important report.
The European Parliament own-initiative report on innovative financing could not have come at a better time, because the crisis which, as we all know, is putting everyone to the test, especially the euro area at the moment, has resulted in a severe reduction in public sector resources, extensive austerity programmes and budgetary consolidation in the majority of Member States. At the same time, it has put massive pressure on the EU budget, as we saw very recently in the debate on the new financial framework.
As described, this situation has given rise to a basic and commonly accepted conclusion. It is the citizens of Europe who are shouldering most of the weight of the crisis, with pay cuts, with unemployment, with the insecurity surrounding their jobs and with cutbacks in their social rights.
The second basic and commonly accepted conclusion to come out of this situation is that Europe and the Member States urgently need new resources which will help to bring about the speedy recovery of and growth in the European economy, this time in a balanced manner that limits inequalities and divergences. This is the only way to create the preconditions to the successful implementation of the EU 2020 strategy and the only way that allows us to discuss a real, proper and strong internal market that will benefit its citizens.
We therefore need new resources and we agree, as expressly stated in the report and I quote, that: 'an increase in the rates and scope of existing taxation tools and further cuts in public expenditure can be neither a sufficient nor a sustainable solution to address the main challenges ahead at European and global level'.
Innovative financing can play a key role in meeting these challenges because it can help enormously in generating resources for national budgets and for the EU budget. However, that is not the only benefit of innovative financing: innovative financing does not simply mean finding new resources; it is equally important for us to pave the way for gradual changes to the current tax model, under which the main burden of taxation and of funding the economy in general has traditionally been borne by labour, business and productive investments.
The considerable added value of innovative financing, the double dividend as it were, is that, as well as generating revenue, it can also assume an important regulatory role: it can discourage harmful practices and conduct both in the financial sector and in the environmental and conservation sector.
The report comprises four basic chapters: taxation of the financial sector, Eurobonds and European project bonds, carbon tax and financing for development.
As far as taxation of the financial sector is concerned, we have again started from a basic and commonly accepted premise: that, even though it was basically responsible for the crisis, even though it generated and, despite the crisis, continues to generate excessive profits, the financial sector is under-taxed, because it is exempt from value added tax almost across the board.
Another commonly accepted premise, based simply on the figures, on the data, on how the volume of financial transactions has soared over the last decade, is the huge and constantly increasing diversion from its basic role, which is to finance the real economy.
These two assumptions are broadly accepted by Parliament and by the European Commission in its recent communication on taxation of the financial sector.
So what we face here is a blatant injustice which needs to be remedied by sending a strong message to the citizens of Europe, a message that we have indeed learned from the crisis, that we are seeking a fairer distribution of burdens, and that we are determined to take any action needed at global and European level to bring the financial sector back to its basic role, which is to finance the real economy.
There is broad assent that the most suitable tax mechanism for achieving these objectives is a tax on financial transactions. A tax such as this would be predicated on quantity, frequency and, ultimately, quality, by which we mean the added value of the transaction itself, because, as we all agreed in paragraph 13, 'the introduction of an FTT could help to tackle highly damaging trading patterns in financial markets, such as some short-term and automated HFT transactions, and curb speculation'.
Obviously, we all want, as our first choice, for this tax to be adopted at global level. However, it is equally obvious that, the initial ambitious statements notwithstanding, instead of the probability of global agreement increasing, it is constantly shrinking.
The question, therefore, that arises here is, what are we in Europe going to do? Are we going to hide behind the lack of global agreement? Is that enough and, more importantly, will it convince the citizens who are shouldering the burden of the crisis? Even if it will not be easy to go right ahead and adopt a financial transaction tax at European level, because it will be hard to obtain a unanimous decision by the Council, as the only European institution elected directly by European citizens, the European Parliament has a duty to send out a clear political message along these lines. It is our duty, not the European Commission's duty, to send out a strong political message.
(Applause)
Algirdas Šemeta
Member of the Commission. - Mr President, I would like to thank the Committee on Economic and Monetary Affairs and the Committee on Development and, in particular, Anni Podimata, for her report on innovative financing at global and European levels.
I have already had the opportunity to debate with you several times on how to make the banks pay for the costs of the crisis. As you know, the Commission is preparing an in-depth impact assessment on instruments for the taxation of the financial sector, to be delivered by summer 2011.
This will enable the Commission to make appropriate proposals on policy actions. In addition, we are also scrutinising the cumulative impact on financial institutions of new regulation, bank levies and taxes, and will present the results later this year. I would encourage you to wait for the results of the impact assessment before taking any firm position on the introduction of a financial transaction tax at EU level.
As regards carbon taxation, I agree that the current taxation model does not fully embrace the polluter-pays principle. I welcome the EP's support for strengthening the Emissions Trading System, as well as for a comprehensive revision of the Energy Taxation Directive (ETD) to make CO2 emission and energy content the basic criteria for the taxation of energy products. A proposal for revision of the ETD is planned for spring 2011.
I hear also your concerns as regards the potential risk of carbon leakage. The Commission favours transitional free allocation of allowances and access to international credits for companies under the Emissions Trading System. We are nevertheless continuing to monitor the current and future risk of carbon leakage. And I am convinced that a solution similar to free allocation under the Emissions Trading System can be included in the ETD revision.
Finally, on Eurobonds, the Commission recognises that, depending on its precise modalities, joint issuance of Eurobonds could benefit bond market efficiency and integration and support for the euro as an international currency. However, this instrument merits further analysis and discussion at technical and political level; moral hazard implications for Member States need to be further examined, in particular.
Marian-Jean Marinescu
Mr President, achieving European objectives for sustainable development, security of energy supply and climate change requires a substantial financial commitment, particularly in terms of innovation and research, as well as new ways to supplement existing funding. The Commission must consider in this regard the feasibility of introducing a carbon tax, similar to VAT, to be applied to any product on the internal market. It is very important, however, to eliminate the possibility of charging these costs to consumers and to analyse risks to the competitiveness of Europe's industries on the single market.
The efficiency of the utilisation of structural funds and European Investment Bank funds must be improved, and so must the coordination of EU funds, national funds and other forms of support that can act as a leverage to stimulate investment in energy efficiency. Adequate investments in energy supply and energy efficiency reduce dependence on market volatility and positively impact on the EU economy.
The Commission should carry out, as soon as possible, an impact study on the taxation of financial transactions at EU and global level in order to examine the effect and economic benefits they produce by reducing the volume of speculative financial transactions that are currently causing serious market disturbances. The study should analyse whether taxation of the financial sector in the EU can, indeed, be a source of the Union's own resources and contain specific proposals on the procedure for introducing the tax.
Jean-Paul Gauzès
Mr President, Commissioner, ladies and gentlemen, I would firstly like to make two comments in relation to form: the rapporteur has just acknowledged all those who contributed to this report. This work was indeed a real team effort, in which our group member, Mrs Hübner, was particularly involved as shadow rapporteur. However, I have learned that the socialist group has submitted an alternative resolution, which means that a document on which there has been no consultation shall be put to the vote first.
My second political comment - I do not usually make such comments - is that we are creating an artificial opposition here, especially with regard to the tax on financial transactions. The position of our group is clear: we are in favour of such a tax at global level; we are in agreement with it being trialled in Europe if it cannot be trialled globally. We simply feel that we cannot rush into this kind of decision without carrying out a thorough impact assessment in order to verify that the competitiveness of Europe's financial centres will not be affected. In this regard, Commissioner, I would like to state clearly that the position of the Group of the European People's Party (Christian Democrats) is not to play for time, or to put matters on standby. We urgently and strongly request that the impact assessment which we have repeatedly discussed in this Parliament be duly and promptly carried out to allow us to make an informed decision on the matter.
I think that, on the one hand, there is the hype which the opinion columns in some European newspapers serve to create, and, on the other, there is the real situation, where we have to manage this issue seriously by having a thorough knowledge of the advantages and disadvantages and making a political decision as quickly as possible.
Udo Bullmann
Mr President, I am sorry, Mr Šemeta, but what you are presenting is not enough. It is months since Parliament gave you the job of investigating what action we can take, including in respect of a financial transaction tax; we gave you the job here in this House. You have not done this. What we know of your position - which has been presented in writing by the Commission on more than one occasion - is something different. You want us to tax the small financial service providers: those that still maintain branches, that care about their customers, that care about medium-sized businesses, that ensure business credit is still available. The parties you do not want to tax are the speculators: those who shift millions and billions around the globe with their high frequency trading, thereby ensuring that our economy is unpredictable - unpredictable even to good entrepreneurs and good investors who want to create decent jobs for the future. Your position is therefore unsatisfactory and consequently, this House must find its own voice.
I am sorry to say that Mr Gauzès - whom I otherwise hold in very high esteem - is wrong on this occasion. He is wrong because he is watering down the position adopted by this House previously in the Berès report. Anyone who votes in favour of Mr Gauzès's proposal will be ensuring that the Commission does what it wants to do anyway - namely, proposes no financial transaction tax. That will be the result of agreeing with Mr Gauzès. That is why it would be wrong to agree with him in this instance.
Anyone who wants to give this House a voice, who wants to win back trust, who wants to ensure that the citizens of Europe can once again look to our institutions with hope and a belief that we are doing something to deal with the crises must, in this instance, vote in favour of the alternative motion tabled by the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament and must vote in favour of Amendment 2, which has been endorsed by more than 120 Members of this House from all the major groups. Thank you for your support.
Olle Schmidt
Mr President, I wish to thank Mrs Podimata for her constructive cooperation. We have managed to reach a compromise despite major differences of opinion. Now is the time that it is important for us to stand by the compromises that we adopted in the Committee on Economic and Monetary Affairs. I would like to address my comments to Mr Bullmann, in particular.
The fact that the report emphasises the importance of creating a real internal market without barriers is a good thing. This, of course, provides the basis for Europe's growth. It is important to discuss the possibility of financing infrastructure projects with the help of European project bonds, for example, as well as a possible solution for European carbon taxation so that we can switch to sustainable production in Europe.
It is also important to point out that the Member States - those States in which you live, ladies and gentlemen - must meet the aid targets in order to be able to finance essential projects. Unfortunately, only Denmark, Luxembourg, the Netherlands and Sweden are currently meeting these targets.
I also believe that the financial sector should be involved and should pay the costs incurred by States and taxpayers in rescuing banks in crisis. However, I do not believe that the introduction of a financial transaction tax is the solution.
My country introduced a kind of financial transaction tax on a unilateral basis during the 1980s and this merely resulted in important parts of the financial sector relocating to London. I am aware that we should be cautious about making comparisons between Sweden and Europe, but the financial market is readily mobile and it is therefore important to learn lessons from Sweden's example. There is therefore a big risk that the stabilisation of the financial market that we hope will be brought about by a financial transaction tax will not be realised if the EU introduces such a tax independently.
In the opinion of the Group of the Alliance of Liberals and Democrats for Europe, a financial transaction tax must be global in nature in order for it to be able to have a positive effect. The ALDE Group rejects Amendments 1 and 2, but is favour of Mr Gauzès's Amendment 3.
Philippe Lamberts
Mr President, why are we discussing innovative financing? Have we gone tax mad all of a sudden? Of course not!
As you know, we must rebuild public finances on sustainable foundations. This, of course, means responsible spending, but it also means generating revenue in a fair, efficient and sustainable way and, as you know, the tax systems which are currently in place in Europe do not meet these criteria. These systems do not guarantee the resources that governments require in order to fulfil their public service duties - teaching, research and social cohesion are areas which come to mind. They have failed to stem the increasing inequalities across Europe and they continue to encourage activities which are harmful to both the environment and social cohesion.
Whether it be a question of taxing the financial industry, obtaining a fair contribution from large companies, implementing a climate-energy tax or tackling tax evasion and avoidance effectively, only a Europe-wide approach, as you know, will enable us to implement effective solutions. Individual efforts by Member States are no longer effective. We are tired of hearing that all of this is impossible and that we need unanimity. What do you expect? It is too complex.
Without taking common action, no European Union Member State will be in a position to restore sustainable public finances 10 years from now. When it comes to economic governance - because that is what this is also about - the current proposal is to say to Member States: 'Cut off your expenditure arm while tying your revenue arm behind your back'. That is what is being referred to as a competitiveness pact. I would very much like to see how you fight with one arm cut off and the other tied up.
I think that Mrs Podimata's report opens up avenues which will indeed help to provide answers to the tax issue, and I therefore hope that it will be adopted by this House.
Ivo Strejček
Mr President, the board in this meeting room shows that today's topic is called innovative financing. I think that it is right and proper to say here that we are actually talking about the introduction of new European taxes, and we already know in advance who will have to pay them. It is banks and financial institutions which will pay these new European taxes. I think that it is wrong to blame the banks for triggering the financial crisis or to say that the economic crisis is their fault. After all, we have known for a long time that the main cause of the crisis was a worldwide economic imbalance, long-term low interest rates, excessive regulation of the financial sector and unfortunately, political interference in areas in which politicians have no business to be making demands.
The amount given in the documentation that the European Union or European institutions will gain, for example, from the introduction of a financial transaction tax, is very contentious. This is because it is highly likely that the financial sector will improve its yield in reaction to each tax and the introduction of any new taxes, or, to the detriment of the European economy, eventually move their tax residence to outside of the European Union. However, if the banks and financial institutions do stay here and continue to offer financial services, then they will, of course, evidently pass these costs on to their customers and consumers.
It is good to see that there is some very complex financial consolidation going on in the Member States and I think that the European institutions should also get involved. Unfortunately, there has not been any mention of the European institutions making any cuts in their expenditure; instead, there has only been talk of introducing new taxes. If the European institutions closed down some of their European agencies, which are often unnecessary, excessive and expensive, then there would surely be some funds left over to support several European projects.
I would like to add something on Eurobonds. If Eurobonds are adopted, then it follows that there is no need to economise, no need to put money aside for the future, and no need to carry out reforms, because someone will always pay them off. There is an increased moral risk here. The European Conservatives will vote against this proposal, because we are against the introduction of new taxes and the raising of taxes.
Jürgen Klute
Mr President, ladies and gentlemen, the call for a financial transaction tax is nothing new; opponents of globalisation have been calling for such a tax for some years. Just five years ago, however, hardly anyone would have thought that it might be possible to implement it in the foreseeable future. Yet this week, it is on the agenda of the European Parliament alongside a CO2 tax and Eurobonds, and rightly so in my opinion.
I can only welcome and support the financial instruments proposed by Mrs Podimata in her report, and I believe they will be voted through. These instruments are urgently needed. So far, the consolidation of national budgets has concentrated solely on cuts in expenditure. However, cuts in public spending primarily impact workers, pensioners and the poor; in other words, those reliant on the welfare state.
The income side of public financing has been completely disregarded to date. It is the second lever that we can use to consolidate national budgets. In particular, addressing the income side would result in the main perpetrators of the public debt crisis shouldering an appropriate part of the public debt.
If we are to consolidate national budgets, then it is quite simply imperative that we increase tax revenues. In fact, the high level of public debt is mainly a result of the nationalisation of private debt; in other words, of governments taking on the debts of private banks and financing the consequences of the financial crisis. The states are thus in no way solely responsible for the debt crisis. Asking the financial sector to dip into its own pockets is therefore not simply obvious; it is our political duty. A financial transaction tax would at last mean this sector shouldering part of this debt as one of the main perpetrators of the public debt crisis. This report would send out an important political signal were it to be adopted as presented.
Similarly, we consider Eurobonds to be a sensible and, thus, also a necessary instrument. They will do more to reduce debt than all the sanctions and advice put together, however well meant. The complaints by some countries in surplus that Eurobonds would increase their interest burden are unacceptable since, at the same time, these countries in surplus are earning more from their exports to deficit countries. Some might criticise this as a transfer union. However, anyone who wants a social Europe - who wants the EU to continue to hold together in the future - must accept the idea of a transfer union at least in principle.
Finally, I would like to say to the Commission that I hope that it will now finally present proposals for a financial transaction tax; we have been calling for this for over a year now.
Nigel Farage
on behalf of the EFD Group. - Mr President, the theory of a Tobin tax has been around for years - the idea of a global tax on foreign exchange - but, of course, it has never seen the light of day. What is being proposed here - and, of course, it is because the European Union is so desperate for money and is in so much trouble that it needs its own resources - is to use an opportunity to bash the financial sector because they are very unpopular at the moment and to introduce a financial transaction tax just in the European Union, as if somehow that will gain us great revenue.
I am sorry, but we are living in a global economy. If we become uncompetitive through tax or regulation, people simply move - and they can do so in the space of 24 hours. To do this would be to pursue kamikaze economics. The biggest foreign exchange market in the world - the biggest financial sector in the world - is in London. If I did not know better, I would think perhaps there was a plot afoot here to stop the Anglo-Saxons going on doing all of their business.
In 2010, as a result of the AIFM Directive, one in four hedge funds left the City of London. If we continue down this route, Britain will have lost its biggest single industry. I think the time has come when the City of London and Britain's financial markets are going to rise up against membership of this European Union. Maybe, if we vote for this tomorrow, it will be so bad that it will be really rather a good thing for UKIP and our view that we should not be part of this massive socialist experiment.
Martin Ehrenhauser
(DE) Mr President, you are wrong, Mr Farage. From me, it is a clear 'Yes' to a financial transaction tax. In my opinion, this is an area in which the European Union can prove itself. Yes - we need the European Union precisely for such matters. The European Parliament can prove itself here, too. If we all vote in favour tomorrow, then this could represent a decisive new step towards a financial transaction tax. Politics could then provide the right answer that would once and for all free us from the chains of servitude to the financial sector.
However, the financial transaction tax should not only provide incentives for the financial sector to make long-term investments here that provide added value for the real economy; no, it should also have a social component, and it should also result in the tax burden being clearly shifted away from workers. To do this will take courage, even in this House, particularly when it comes to laying down the tax rate. A tax rate of 0.03% or 0.05% is not sufficient. We should set ourselves a target of at least or up to 0.5%. So yes - let us make a clear commitment to a Europe-wide financial transaction tax. I will certainly be voting in favour of Amendment 2 tomorrow.
Markus Ferber
(DE) Mr President, Commissioner, ladies and gentlemen, this debate is actually about innovative financing, but we have already heard something about that. Innovation does not simply mean inventing new taxes or re-labelling what has always been there, such as national debt.
I would like to concentrate very briefly on what this debate is really about. It is not about the introduction of Eurobonds - and the CDU/CSU parties will certainly speak out against that - but rather it is about learning the lessons of the crisis in the financial markets, and that means quite simply that speculation must be taxed too. It also means - and I will state this quite clearly - that if this cannot be done worldwide at the G20, then we must do it at European Union level.
There is no alternative; that is why I am not simply looking for applause now, Mr Bullmann, but for a clear, strong vote by the European Parliament tomorrow. In this, Commissioner, the Commission must act as our ally against the Member States - particularly against the Member State that we have just heard speaking so loudly about what the City of London thinks. I will simply say to you, Mr Farage: look at the unemployment figures and look at the economic decline of your country, which has concentrated on financial market products. If you still built cars - as we do in Bavaria and in Germany - then you would be doing somewhat better now. That is why the financial transaction tax must be called for and introduced now as a matter of urgency. It is our duty as Europeans.
Leonardo Domenici
(IT) Mr President, ladies and gentlemen, Mrs Podimata's report contains many important aspects that are not limited to the issue of the financial transaction tax. The report is packed with analysis and suggestions and I hope it is widely supported by this House.
It could be the basis for the genuine new European tax policy that we need. On the subject of tax harmonisation, this report also contains proposals that move towards a tax harmonisation that gives new strength and subjectivity to Europe, although it is clear that at the moment, the debate focuses mainly on the financial transaction tax, to be applied as a first step across Europe. I think this is the time for courageous decisions, which should be applied in a balanced way, but still indicate the direction forward. I believe that Europe has a responsibility to show the world the way ahead; I believe that this House has a responsibility to send out a signal and a political message.
Let me say one thing to Mr Schmidt, whose intelligence and lucidity I really respect: be careful with the arguments we use, because if we say today that we cannot levy a financial transaction tax because there are tax havens, we will make European citizens feel helpless at a time when many of these financial institutions are starting to go back into the black.
Not only the Socialists are saying this. In my country, Italy, this proposal is also supported by many autonomous and independent groups; it is also supported by the Catholic, democratic movement for the promotion of development and balanced growth.
Sylvie Goulard
(FR) Mr President, I would like to acknowledge the work of our fellow Member, Mrs Podimata, which actually tackles several highly sensitive topics. I will not discuss Eurobonds, which I am dealing with myself in my report on economic governance. I would like to raise three issues regarding the tax on financial transactions.
Firstly, do we need new sources of revenue and do we have the right, in this Parliament, to discuss the revenue side from time to time? My answer to this is 'yes'. There are some taboos in Europe; however, it is my belief that we will be unable to have a comprehensive discussion on how to end the crisis if we cannot tackle this topic without taboos, and so I welcome the work carried out by Commissioner Šemeta on alternative taxation.
Secondly, do we need a tax on financial transactions? In my opinion, it is an extremely interesting avenue to explore. I would refer, for example, to the work recently carried out by the European Central Bank in the consultation organised by the Commission on the Markets in Financial Instruments Directive (MiFID), and, in particular, to the section on high-frequency trading, that is to say, extremely rapid transactions performed by computers. It is clear that there have been some recent and dangerous developments, and here I share Mr Ferber's view that we must make a distinction between market activities which allow liquidity to be raised and those of a more speculative and probably harmful nature.
My third and final question is: do we need global or European rules? I would like to know what is meant by 'global'. Are we going to wait until the world's last remaining dictatorship has given its go-ahead before we make a decision on something in the European Union? Are we hiding behind globalisation in order to avoid facing up to our responsibilities? I think that that would be completely unreasonable. Clearly, we must consider the risk of relocation - we are not irresponsible - but, on the other hand, this Parliament should not make its decisions under threat.
Sven Giegold
(DE) Mr President, ladies and gentlemen, first of all, I, too, would like to express my thanks to Mrs Podimata. She has not had an easy job in recent weeks. I am sure you will have noticed from the e-mails that we have received and from the heated debate that has taken place - even within some of the groups - that this is an issue that is being watched very closely by many of our citizens, who want to see exactly what position politicians in this Parliament will take on this matter.
The financial transaction tax is the result of a citizens' initiative that is driving this proposal, which is essentially based on the Tobin tax, and Parliament's position on the matter will therefore be decisive. Firstly, there is a key question: does it have to be a global tax? At a global level, there is scarcely anyone who opposes this tax. The next question is: should we also introduce it at a European level? To be frank, I regret to say that many of its opponents are hiding behind the argument concerning Europe. We should categorically reject such hidden tactics here and now, because we have successful transaction taxes even at a national level and these transaction taxes work in sub-markets.
In other words, even if Mr Šemeta is currently working on the impact assessment, there is no point in investigating whether or not a transaction tax can work; we should investigate only in which sub-markets it can be introduced nationally, in which sub-markets it can be introduced across Europe and those sub-markets where it can only be introduced globally. It also means that as the amendment is worded, anyone who claims to want transactions to be taxed has no reason to vote tomorrow against the wording proposed jointly by 120 Members.
I call on you, Mr Šemeta, to make your impact assessment fair and to take into consideration how undertaxed the financial sector is. Ladies and gentlemen, let us send out a clear signal tomorrow in favour of a European financial transaction tax. There is no technical reason not to do so.
Ilda Figueiredo
(PT) Mr President, there has long been a need to create a financial transaction tax (FTT) at global level and, therefore, also at European Union level, just as there has been a need to put an end to tax havens and speculative financial products. There has long been a need to control and effectively regulate the capital market, preventing speculation on a very wide range of products, including commodities, property transactions, pensions, and insurance, as well as a whole panoply of derivatives, including those based on sovereign debt itself.
Unfortunately, the European Commission has made no progress with these proposals, but it is well known that tax evasion and tax fraud are estimated to cost some EUR 250 billion per year in Europe, which would be enough to cut the public deficits without the need to raise taxes. According to current projections, even at a low rate, an FTT would generate almost EUR 200 billion per year at European Union level and USD 650 billion at global level.
It is in this context that we ask how can it be accepted that a clear position regarding the creation of an FTT at European Union level should be postponed under the pretext of another study, of new studies, of further evaluation? It is time to take clear decisions on the inspection and taxation of capital. It is time for us to stop making, above all, the workers, microenterprises and small businesses pay for the economic and social crisis.
Marta Andreasen
Mr President, the European Union has wanted to fund itself with a European tax for some time now. It seems its preference would be for a financial transaction tax. It is estimated that this would generate EUR 200 billion per annum.
I strongly oppose a new tax levied by the European Union, fundamentally because this would allow the European Commission to decide on the size and composition of the EU budget without any say on the part of the Member States and their citizens. Worse, it would deprive the Member States of the possibility of calling the EU bureaucracy to account.
If it is introduced at national level to control risk in the financial services industry, the costs will inevitably be passed on to the tax payer. While there is a feeling that the financial services and banking sector should meet the bill for the crisis, we should not cheat our citizens by imposing on them an additional fiscal burden.
Andreas Mölzer
(DE) Mr President, taxing speculation - which, in many cases, brings no benefit for the real economy - by means of a financial transaction tax is undoubtedly the right approach. However, such a tax should not be used as an opportunity to bring in something akin to an EU tax by the back door and to justify fiscal sovereignty for the EU. Unfortunately, however, this report takes us in precisely that direction. In my opinion, the EU is not a state - and it should not become one either. Fiscal sovereignty must remain the responsibility of the Member States.
If Brussels cannot manage its budget, then cuts will have to be made. There are enough powers already that would be better regulated at a national level instead of at EU level. Moreover, the jungle of subsidies and EU agencies offers plenty of potential for savings. The introduction of Eurobonds that is also recommended in the report is, in my opinion, to be decisively rejected. It goes against all economic sense and is nothing more than a further measure to make the EU into a transfer union. That is something that I reject.
Diogo Feio
(PT) Mr President, the issue of innovative financing at global and European level is not only important but also extremely current. I find it regrettable that it has been reduced to the existence or non-existence of a new financial transaction tax, but even so, I will not duck the debate.
There are a series of questions that I would ask here. First of all, does this House know of any crisis that has been resolved through the existence of a new tax? Do you know of any studies on the cost of administering this new tax? Do you know of any studies determining the effects that this new tax will have on the economy? To be completely honest, I do not know of any. Moreover, do you know of any form of regulation that is carried out by establishing new taxes, or is regulation carried out through supervision and control of the market? It seems clear to me that that is the case.
I will finish by calling for this debate and discussion to be undertaken with the proper level of calm, and not on the basis of the ideologies of those little concerned with the growth of the economy and of businesses, and with public wellbeing.
Enrique Guerrero Salom
(ES) Mr President, in a few months, it will be four years since we felt the first symptoms, the first effects of this devastating economic crisis, the worst the world has seen in the last three quarters of a century.
It began as a great international upheaval in the financial world; then it became an economic crisis and expanded into the real economy, affecting growth and jobs, and causing severe social impact; and we should not forget that, for hundreds of millions of people around the world, it is a humanitarian crisis.
Since then, we have seen numerous international meetings, most notably of the G20, with a strong presence of European Union Member States. Many firm statements and formal undertakings have been made at these gatherings to reform the international financial institutions, to reform tax systems, to introduce levies on international financial transactions. However, they have all been little more than formal statements.
In fact, all the actual work needed to fight tax havens and reform the financial institutions is yet to be done.
I would like to establish a link between this report and the needs of development policies. Developing countries suffer the effects of the crisis to a greater extent than others: they have less growth, fewer jobs, greater difficulty in obtaining external funding, larger debts and less official development aid. The financial transaction tax would provide a potent new source of development funding.
I therefore believe that these aspects of the Podimata report deserve our support, and I would at this point like to call on Parliament to be true to itself, reminding the House that introduction of the levy was approved by this Chamber in March 2010 in a report on the impact of the crisis on developing countries.
Carl Haglund
(SV) Mr President, I would like to thank the rapporteur, who has succeeded in producing a report that is also stimulating debate. I think it is important to remind ourselves of the fact that the European Commission has actually promised to put forward a number of ambitious proposals by the summer regarding what we usually term 'own resources'. These particular taxes that we have just debated are certain to be included in this.
That is perhaps also why I think that own-initiative reports, where we take the initiative ourselves with regard to a particular matter, can be slightly troublesome, because we tend first to request important preparatory work involving studies of the impact that various taxes and other things might have, only then, here in this Chamber, to pre-empt this important preparatory work by saying what we want regardless of what information the Commission prepares.
I think Mr Feio was on the right lines in this regard, because it is often the case that we approach these taxes from an ideological perspective. For example, we are currently talking about imposing a tax on the financial sector. The whole situation is very complex. We rarely hear arguments relating to the technical details of what this will entail. It is instead a question of a principle: we want to have such a tax.
In this context, we can also discuss how innovative we are being. For ideological reasons, we wanted these taxes 30 years or more ago, so it is nothing particularly innovative to call for them. Nevertheless, I can understand that some people may think they are necessary. I personally think it is important for us to introduce a financial sector tax and for us to do so at a global level. Someone here asked what that would mean. It would not mean that we have to wait for the last dictator sitting in some corner of our planet. It is rather a question of whether we could achieve something at G20 level. This, of course, is also what France, which is chairing the G20 this year, is aiming for.
Yet at this point, we do not have the patience to recall that we will be getting serious proposals from the Commission by the summer. I therefore believe that we will make progress without making this issue an ideological one, because it is also a pragmatic one. We must also remember that these taxes actually have to work in practice.
Keith Taylor
Mr President, I rise to speak in favour of the financial transaction tax (FTT). The FTT provides an opportunity to redress the balance and the damage caused by the austerity measures, the deficit and the measures adopted to repay it.
It is important, though, to introduce taxation which is relevant to the current circumstances since, in the UK for example, Barclays Bank only paid GBP 113 million in corporation tax in 2009, at well below the UK rate of 28%, while the Royal Bank of Scotland allocated EUR 25 billion to tax avoidance schemes that year and cost the British and US exchequer EUR 500 million in lost revenue.
In the UK, a group has been formed to support the FTT. It is called the Robin Hood Tax group, after the legendary figure who stole from the rich and gave to the poor.
I support its campaign, and I urge Parliament to do likewise.
Niki Tzavela
Mr President, the report of Mrs Podimata is very well balanced and very well explained, and we should all welcome the four financial means introduced by the report tomorrow. The four measures are all innovative and I should say that we should not confine the debate only to the financial transaction tax. We should be careful in choosing which ones will be implemented; we should exclude tax on sectors such as the energy sector which have a multiplying effect on living costs. Thus, for the final phase of the issue, the Commission should conduct an evaluation through an impact assessment of the efficiency and potential results of the use of these instruments.
Gunnar Hökmark
Mr President, first of all, I would like to congratulate the rapporteur for highlighting some interesting political differences in this report.
Let me also clarify one thing after having listened to this debate, which is that a financial transaction tax will not be paid by anyone other than the customers. It is the same as for electricity, cars or any other goods or services. With the taxes on those, the price is increased for the customer. No banks will pay for this. Banks will, in any case, need to be increasing their capital during the coming decade.
So, the tax will be directed at customers. That might be good because, of course, we need taxes. But is it a good tax? As my colleague, Mr Schmidt, mentioned earlier, we tried it in Sweden, where it was called the 'puppy' tax. It was more or less the same tax we are discussing now and it was a success - for the City of London! This was because the trade in shares moved to London and the trade in bonds more or less died.
That is why I am a little surprised at what has been said in the debate. The difference is between those who want to know what the consequences would be and those who do not want to know the consequences - those who want an impact assessment and those who do not want one. Let us think about whether we are not at this point making the Mayor of Shanghai a very happy person. I believe we should follow the EPP line on this issue.
Arlene McCarthy
Mr President, I want to thank our rapporteur for this report and to focus my comments on responding to the public's call for fair taxation on the financial services sector.
We should remind ourselves that citizens have already provided a massive taxpayer bail-out of EUR 4.5 trillion of State aid to the banking sector - EUR 9 500 per man, woman and child in the EU - and, of course, the public are continuing to pay with the loss of their jobs during this extreme financial crisis. Now that this sector has returned to profit and is paying out large bonuses (in fact, that is how, Mr Hökmark, they can recapitalise - they do not need to worry about taxes; it is the bonuses they should get rid of), it is only fair that this sector, like any other, makes a fair contribution.
The question is: why should the EU own-resources, including the VAT element, be borne by householders and taxpayers, while the financial services industry is largely exempt from VAT? While Ireland borrows EUR 85 billion to solve its economic crisis, its total support to banks is estimated at EUR 725 billion. Our citizens rightly believe it is time for the financial services sector to pay a fair contribution. Even Mervyn King, the Governor of the Bank of England, this weekend said that if we do not have a fundamental reform of the financial services sector, we are heading for another banking crisis.
This report does not say how we should introduce an FTT or how much it should be. It is now clear that we are at the beginning of examining evidence in this area, and one study shows that even a minuscule tax just on foreign exchange trade could raise USD 26 billion worldwide.
We support further studies. Of course, we also support you, Mr Šemeta, in making sure that we do not have the failed Swedish model, which is not a good example of an FTT. But, Commissioner, can I say to you that, before seeing results of studies, I am a bit disappointed that your consultation paper already excluded an EU FTT. You are right, Commissioner: let us see the evidence before we reject it. I am disappointed that you have already taken that decision.
Tomorrow's vote, therefore - and I will finish on this - is in favour of this report and the principle that the financial services should now pay its way. It is a vote that backs our citizens and the view that they should not be left paying continually for the mistakes of the financial services and the banking sector.
Satu Hassi
(FI) Mr President, I thank the rapporteur for her excellent work. I would have liked to see greater weight placed in this report on the matter of the financing of international climate actions, although I also strongly support the financial transaction tax. As for the financing of climate activities, last year, the work group set up by the UN SecretaryGeneral proposed a carbon tax as one option for emissions from international shipping. This should be taken seriously in the EU.
At the time of the 2008 Climate Package, we decided that, unless the International Maritime Organisation had established a global scheme for controlling emissions from shipping by the end of this year, the EU would take action itself, in the same way it did with air traffic. A carbon tax for shipping arriving in, and departing from, the EU would be a globally significant measure, as this would affect a third of all international shipping and would provide developing countries with a stable source of cash for their climate actions.
Antonio Cancian
(IT) Mr President, Commissioner, ladies and gentlemen, I think today's topic is a fundamental issue because it concerns not only financial taxation, but also an important market topic. Through Eurobonds - we must distinguish between Eurobonds and project bonds - the time has come to develop and drive our economy through the fund known as the project bond, in particular, trans-European infrastructures in the transport, energy and telecommunications sectors, backed by research and innovation.
We must lead the way in these areas: this is the underlying theme of today and hence, the change of pace. When we speak of the Union method, which is on all our lips, this is an opportunity to give it some substance. Unemployment is today's real social problem; this is our task today.
When we charge taxes, whether throughout the world, or only in Europe, I believe we make our companies less competitive. When we decide to make the increase, as well as being difficult to apply - because we want to hit only those who are speculating, but we shall not succeed - we shall not succeed because it is difficult to apply and we must do it at the G20 level. Finally, as regards carbon taxes, I believe that the taxes should not be increased but regularised.
Liem Hoang Ngoc
(FR) Mr President, ladies and gentlemen, the report we are debating today offers genuine advances. I am thinking, in particular, of Eurobonds, which the Union will need in order to finance the Europe 2020 strategy.
Unfortunately, the right rejected in the Committee on Economic and Monetary Affairs the principle of a tax on financial transactions at European level, despite having voted in favour of it in June. Its arguments for rejecting a European tax on financial transactions as a prelude to a global tax are the same as those put forward by the supporters of tax havens. It tells us that implementing a tax at European level alone would be disastrous for our financial sector. It also says that there would be a flight of capital from Europe.
My answer to that is: so what if there is? The current volume of financial transactions is excessive compared to the needs of the real economy. Implementing this tax solely in Europe would help deflate the bubble.
Furthermore, if the volume of speculative capital transactions, such as the credit derivatives at the origin of the crisis, were somewhat reduced, it would really help to consolidate the balance sheets of our banks. They would have a much greater incentive to finance the real economy.
I would point out to those who are using the absence of an impact assessment for cover that no impact assessment was performed before the green light was given for a proliferation of derivatives.
It is time, ladies and gentlemen, for all MEPs to face up to their responsibilities. The European Union must not continue to tag along behind a G20 dominated by the United States and China. It must lead the way in reforming our financial system.
That is why I cannot support a text which chooses to overlook a tax on financial transactions.
Rodi Kratsa-Tsagaropoulou
(EL) Mr President, Mrs Podimata's report contains interesting ideas - both ancient and modern - which are especially topical at this moment in time, given the challenges we face in the euro area, and in the European Union as a whole, in terms of stability and growth. One particularly positive idea is that of Eurobonds.
I wanted to comment, in particular, on the question of a financial transaction tax which, as stated in the amendment which I endorsed, I view as a positive step, even at - albeit - European level, despite its difficulty and complexity, as highlighted in all the relevant studies, in terms of collecting it and how effective it will be if it is only applied at European and not at international level.
However, apart from these technical specifics, we are particularly concerned about its possible impact on the competitiveness of the European economy: a prerequisite to our growth which would also appear to be obvious from the attempt to apply the competitiveness pact within the framework of economic governance on harsh and binding terms. We are therefore worried about the impact which such a tax may have in terms of passing on fast-moving financial services, in terms of the lack of liquidity that our market so sorely needs at present, and in terms of passing on the cost to investors and taxpayers.
It is for these reasons, therefore, that we consider the study promised by the European Commission to be a very basic prerequisite. However, there is something else that concerns us: the fact that nowhere is it stipulated where these resources will go. We are not in favour of taxes for taxes' sake; we have no doctrine on taxes. What we need to know is what the outcome will be. I would be very receptive and my proposal to negotiate would still apply to a tax which goes to the EU budget or to the support mechanism.
Elisa Ferreira
(PT) Mr President, there is no point in repeating that the current situation is the most serious test of the survival of the euro and, therefore, of Europe. The Podimata report opens the way for constructive solutions, so I would congratulate our fellow Member on the ideas she puts forward.
The seriousness of the situation does not result from the euro area as a whole having an excessive deficit or external debt, but rather from the persistent and serious divergence of its component economies under the impact of common policy. We lack instruments that would enable convergence between these economies, which would enable Europe to regain its balance, which would enable Europe to grow.
Let us be clear: at the current level of integration, and considering the diversity of their component economies, the euro area and the European Union will not survive with a budget of 1% of their collective wealth. In practice, following the crisis, the only solution that we were able to construct was to prescribe austerity, and it is working people and companies that are now paying for the deficits created by the speculative crisis of the financial sector, to the salvation of which the European Union has committed 26% of its wealth.
It is true that the financial transaction tax (FTT), levied at a very low rate, for example 0.05%, on extremely speculative transactions involving high risk products, will have to be paid for by consumers of such products. However, why should they not pay, if the ordinary people pay value added tax on bread, milk and other staples? The tax burden has to be redistributed so as to harm fewer working people and companies, and shared more equally with the financial and, in particular, the speculative sectors.
Commissioner, I do not think that the Commission should currently be rejecting or avoiding the clear political message that Parliament is giving it. The public consultation cannot exclude analysis of the FTT: on the contrary, its analysis must be given the highest priority.
Theodor Dumitru Stolojan
(RO) Mr President, at nearly 10 percentage points, the European Union already has a higher tax burden than the United States, Japan and other global economic powers, and that means that European companies are at a competitive disadvantage vis-à-vis US companies and other companies acting globally. Surely, there is great enthusiasm to introduce a new tax on financial transactions. However, as we all know, the financial sector has an incredible ability to pass any costs on to citizens and companies. I therefore think that we can only talk about a tax on financial transactions in the European Union if we have a global agreement in this matter.
Secondly, I wish to express my full support for the introduction of Eurobonds to finance European infrastructure projects as a means to attract resources and also attract private sector resources to fund these projects.
Silvia-Adriana Ţicău
(RO) Mr President, I would like to congratulate the rapporteur, Mrs Podimata.
The economic and financial crisis has revealed a number of disproportionate incentives existing in the financial sector, as well as deficiencies in the regulatory and supervisory framework of the financial system. The financial system should contribute to bearing the costs of this crisis in a more equitable and sustainable way. However, we should make sure that, ultimately, tax on financial transactions, introduced by virtue of an impact study, will not be transferred to the consumers, that is, to the citizens. We therefore consider it necessary to establish clear rules to prevent this situation.
Public procurement accounts for 17% of the EU's GDP and represents an important market, especially in areas such as health, transport and energy. Implementation of electronic public procurement systems in the Member States has led to increased transparency and significant savings to national budgets. I call upon the Commission and the Member States to execute at least 50% of public procurement by electronic public procurement systems by 2015, thus respecting the commitments made by the Member States in Manchester in 2005. I also ask the Commission to implement the e-Invoice initiative - electronic invoicing, which is an important tool for reducing tax evasion.
Member States should substantially improve the existing structural funds for research and innovation, transport and energy efficiency projects, helping citizens acquire the necessary skills, improving performance of the national systems, and implementing smart specialisation strategies and transnational projects. In this context, we support the common Eurobond issuance to finance infrastructure projects.
I would also like to draw attention to the unexploited potential of innovative revolving financial instruments aimed at increasing energy efficiency in buildings. In addition, Member States should initiate the preparation of post-2013 structural funds, with particular emphasis on innovation, transport, energy efficiency and smart specialisation.
Astrid Lulling
(FR) Mr President, at a time when we are only just beginning to digest the effects of the financial crisis, it is certainly not forbidden to consider fundamental issues such as innovative tax mechanisms and to propose new avenues such as Eurobonds. If this is to be a truly valid exercise, however, realism should never give way to idealism. Eurobonds could be an instrument of the future if the European Union were to make a genuine qualitative leap in economic governance terms. This is a prerequisite. Let us not underestimate the problems here.
If we listen to Mrs Podimata, things are actually quite simple. We take the money where we find it, and that is that. Today, banks are easy scapegoats. They have sinned and they must pay. That is what the French said to the Germans after the Treaty of Versailles in the 1920s. One particularly well-informed observer, Mr Trichet, the President of the ECB, warned us very clearly of the risks involved in unilaterally implementing a tax on financial transactions in Europe. I have even heard talk of it being introduced solely in the euro area. We are on a slippery slope here; our fellow Member Mr Farage would be delighted! We must therefore be extremely cautious. This is why I am in full agreement with the amendment tabled by my group. It does not close any doors but requests a thorough analysis of the consequences of the choices we may make. Choosing to be ideological at this point in time would be a serious mistake.
For my part, I will not support a measure of which the only consequence would be to penalise the European financial sector over our competitors.
David Casa
(MT) Mr President, I wish to thank the rapporteur for reminding us that the internal market needs to be more efficient and effective if it is to improve. If we take the tax issue in light of all this, and consider that we have only just begun to emerge from the crisis, then I believe that the sudden introduction of taxes is not the right way forward. I say this because I believe that the market has enough burdens as it is - such as the new capital requirements, and the new deposit guarantee schemes - and we have not yet even begun to feel their effect. Therefore, given that we all agree that adopting a global tax will be next to impossible since it is not feasible for Europe to be the sole player in all of this, then I believe we should consider the consequences that this European tax will bring with it. We need to reflect on how the labour market will be affected, on how we are going to create more jobs, on how competitive we can remain as a European market competing with international ones. My party, which I represent here, is not closing the door on this issue, even though we do not agree that the way out of this crisis is by means of introducing a tax. What we are saying is, let us evaluate the impact, let us look at the studies that have been carried out, let us contemplate on how this will affect the European economic sector, and if, in the light of all this, it emerges that this tax will be of benefit after all, then yes, we will go along with its introduction. However, at this point in time, we stand by our belief that new taxes are unacceptable.
Jean-Pierre Audy
(FR) Mr President, my first words will be to commend the work of our rapporteur, Mrs Podimata, as well as the tremendous amount of work carried out by Mrs Hübner on behalf of our political group.
We are all familiar with the data relating to the tax on financial transactions. The first item of data is that transactions and speculation add up to between 80 and 100 times the value of the real economy. The second is that we have Millennium Development Goals - poverty, water, forests, infrastructure, education and health - which have yet to be financed and which require USD 300 billion by 2015.
We are therefore in favour of this tax, but when it is put to the vote tomorrow, an overwhelming vote is needed. Prevaricating would be the most dangerous thing that Parliament could do. An overwhelming vote is needed, and the tax must be a Community one and not an intergovernmental one.
With regard to Eurobonds, there are three categories. The first category is liable to be used to finance sovereign debt, which is a mistake since we will never obtain a political majority to finance the sovereign debt of Member States throughout the European Union. The second category could finance the crisis management mechanism, which has become permanent. We do indeed require Eurobonds for that. Here, I would raise the issue of the political, and therefore parliamentary, control of these Eurobonds. Thirdly and finally, yes, we need these Eurobonds for investment. A continent which does not invest is a continent which will decline. Across the globe, continents are investing. Therefore, we need these Eurobonds, these project bonds.
Sławomir Witold Nitras
(PL) Mr President, I would not like to repeat the arguments of my predecessors, my colleagues from my political group. I would merely like to add one comment.
It is true that the tax on financial transactions would be a tax that would be imposed on the citizen. It is true that the introduction of this tax without any feasibility studies being carried out (and we do not have any available), and only at a European and not at a global level, would be highly irresponsible.
I would like to add another comment. I forgot to thank Mrs Podimata as well as Mrs Hübner, without whose work the report from the Commission would have been considerably worse. The report has, in fact, turned out rather well. It is sober and balanced, with certain themes for consideration, but without ideological excursions and ideas which have no connection with the real world.
I would, however, like to add one more comment regarding the transaction tax. Not only globally but also in Europe, there are countries, including my own, whose banking system has proved its worth during the financial crisis. In Poland, we did not supplement the financial system. Our financial system was already being monitored by our financial supervising authority, and regulations were in place which are only now being introduced at European level. It seems that this system did not generate debt. The idea of introducing a tax on financial transactions will also burden healthy systems which do not share the blame. In my capacity as a European citizen who is aware of systems which did not generate costs, I cannot agree to this.
Just one more comment on Eurobonds. This is a good idea. We do have to fund investments, but even now as we embark on this path, there is a question which I want to put to the European Commission in particular, which is this: How do we ensure that this instrument will include all those who, in the course of time, will want to be part of the euro area, and not just its current members?
Sari Essayah
(FI) Mr President, the financial crisis has meant that we have to consider fair sources of income to achieve growth and prosperity. This report contains both helpful and also problematic initiatives. What is problematic in the report is the proposal for EU project bonds, or Eurobonds, which I absolutely oppose. Eurobonds would blur the responsibility that Member States have for their own economies and saddle the Member States that have successfully attended to their own affairs with these increased interest payments. They would entail a 'moral hazard', as they say.
Nevertheless, I support this 'stock exchange tax', the financial transaction tax, regarding which we should get an impact assessment from the Commission as soon as possible. I might even ask the Commissioner here present: when could we have this impact assessment?
It is also good that this report has paid a good deal of attention to the financing of development cooperation, because the harshest consequences of the financial crisis in human terms threaten to affect those who are assuredly the least to blame of all for this situation, which is to say, the people in the developing countries. The world's poorest of the poor have to suffer because several countries in an economic recession are cutting their development aid, and even their humanitarian emergency aid.
The report also quite rightly reminds us of the importance, not just of development cooperation, but also measures put in place by the developing countries themselves. These countries need to step up their own efforts in the area of taxation, specifically tax collection and the fight against tax evasion. The EU, meanwhile, should improve the coordination of the currently fragmented system of development aid and step up the fight against tax havens.
Damien Abad
(FR) Mr President, we may have just come out of the worst financial crisis the world has known since 1929, but that does not mean that Europe can sit back and relax.
What I have to say is that regulating the international financial system and the idea of a financial transaction tax are not left-wing subjects. This is not purely a socialist issue. It is a subject that concerns the whole of Parliament. In this respect, I have to say it is a shame that the socialist group is tabling an alternative resolution at a time when all our political groups are capable of coming together and agreeing on two proposals. The first proposal is to support the principle of a global financial transaction tax, in line with the G20's proposals and in accordance with its current road map. The second is to look at the possibility of introducing the financial transaction tax internally within the EU, after carrying out an impact assessment. The impact assessment is not designed to hold things up or to give us more time: it is simply there to ensure that this tax is introduced under the right conditions.
I think it is a shame that party political and individual interests are preventing us from creating a strong movement within the European Parliament. I think the subject of regulating the international financial system is too serious to turn it into a party political matter and I think the right and centre parties could say their own piece on the subject just as easily as the left: they could influence the debates, they could be bold and show a sense of responsibility by proposing the introduction of this tax from a pragmatic standpoint, not an ideological one.
Mairead McGuinness
Mr President, I should like to thank the rapporteur for this report.
The two major problems facing the European Union are high unemployment and severe debt burdens. Yesterday, in Dublin, agreement was reached on the formation of a new government - a government which is committed to bringing Ireland out of one of the darkest hours in our history. Ireland faces an unprecedented national economic emergency, a fact of which colleagues in this House are all too well aware. Indeed, we need the understanding and support of our colleagues in order to recover from the difficulties.
The incoming government has many challenges to face, including awaiting the results of the second banking stress test due at the end of the month so that we will finally know the extent of the problem. These stress tests will be a damning indictment of the ineffective regulation of Europe's banking sector - and Ireland's also - but I say Europe, and I underline that point. There are lessons to be learned. On the employment front, our focus will be to get people back to work.
So, on the issues in this report, three taxation measures are proposed. The financial transaction tax has potential, but we do need - and I welcome the Commissioner's comments about this - an impact assessment before we make a final judgment. Can I say that taxation should not be about punishment; it is about the building of resources in a fair and equitable manner.
Regarding Eurobonds, again, there are possibilities here for major infrastructure projects. Those concerned about moral hazard should say that if we had good economic governance, that fear should abate. Lastly, the carbon tax: I have some concerns about this, but at least we are debating these very important issues in this House and tomorrow we will take a vote on them.
Jan Kozłowski
(PL) Mr President, the ambitious strategic targets which the European Union has set itself demand considerable input of investment and resources. On the other hand, the economic crisis has caused many Member States to find ways of economising. It is difficult to reconcile both of these trends, so I consider the search for innovative financing to be important and worth pursuing.
However, I would like to draw attention to two particularly important matters. Firstly, innovative financing must be seen as supplementary to the budget of the European Union. It should be treated as support for the ambitious targets of the European Union, but not as a temptation to reduce contributions from the Member States. Secondly, the influence of the proposed funding methods on European competitiveness and on unemployment levels should be carefully analysed.
George Sabin Cutaş
(RO) Mr President, to achieve the objectives of the Europe 2020 strategy, massive investments are needed at European level in research, education and infrastructure. However, in the context of the austerity policies followed by European governments and growing deficits, these objectives can only be achieved through alternative financing methods. I refer both to joint bond issuance to enable Member States to cover some of their deficits, turning a portion of their debt into European debt and facilitating the obtaining of loans with low interest rates, and the tax on financial transactions.
The latter would impose a minimum charge on the financial sector, whose activities represent approximately 73% of global GDP, and will be used to discourage financial speculation, and to ensure market regulation and investment in European projects. It is necessary for the Union to send out a strong signal in finding a solution to the financial crisis, primarily by implementing these taxes.
Elena Băsescu
(RO) Mr President, a tax on financial transactions would affect competitiveness, but a tax applied globally in the right way could represent a method for collecting additional funds for global policies. In order to have a coherent position, the EU should make an assessment of the impact of introducing such a tax. The study should cover the possible risk of relocating foreign investments in less transparent areas. The extent to which the options considered can be used as innovative financial mechanisms must be observed. Such a tax should not have a negative impact on the banking system. Avoiding possible effects on SMEs and individual investments are, however, two very important aspects.
Finally, I would like to emphasise that only a tax on financial activities would be feasible at European level. In this way, we would only tax the corporations, and not every participant in a financial transaction.
Sylvana Rapti
(EL) Mr President, I will not say thank you or express my gratitude to Anni Podimata. What I will say is: very well done because, at a time when the euro is very sick, she has borne the burden of giving the European Parliament an own-initiative report which suggests a cure. The cure it suggests includes a financial transaction tax.
I have heard a lot of people say 'no': some have said so politely, others have said so directly. However, I have not heard any alternative proposals and I think that we all want to defend the European Union and the euro. I have also heard talk of a study: however, when I hear proposals for a study, I know in advance that the answer is 'no' and that we are just buying time. Do not buy time, Commissioner. Do something straight away. To close the catch-the-eye procedure, I say to you: catch the tax.
Raül Romeva i Rueda
(ES) Mr President, my group and I firmly support the introduction of a tax on financial transactions for two reasons.
Firstly, because it is necessary and useful. A levy rate of 0.05% would provide revenues in excess of EUR 200 billion. At a time when supposedly magical cost-cutting policies paradoxically require more income, I think it is more than necessary to institute the tax. It is essential.
Secondly, because it would enable us to tackle and restrain speculative activity, which constitutes the great challenge currently facing world - and European - politics.
There is one further reason why I support this tax: because thousands and thousands of citizens, represented by a great many organisations, demand it. As political representatives, it is our duty not just to listen but to respond responsibly and consistently, and I believe this Chamber needs to be clear and convincing on this matter tomorrow.
Seán Kelly
Mr President, politicians are supposed to rule the world, and if they do not, the void is filled by others. That is, in part, what happened with the economic crisis, not least in my own country. Thankfully, we are now recovering lost ground and efforts have been made in Parliament to try and rein in the financial speculators - those economic parasites who have wreaked havoc on the markets and on people's lives. The financial transaction tax is a good idea as a basis, but I believe that going ahead with it without global application would, in the words of Nigel Farage, be kamikaze economics.
I was pleased to co-sign Amendment 3, calling for a feasibility study. It is right and prudent that we should wait for that feasibility study to see if it is economically sensible for us to go ahead unilaterally, without the rest of the world. Once that feasibility study is available, we can then make a decision.
Wojciech Michał Olejniczak
(PL) Mr President, the tax on financial transactions is extremely important for the future of the European Union. This tax will contribute to improved control of the financial sector. In the past, a lack of essential controls led to a crisis, to considerable damage caused as a result of speculation on the part of, for example, the banks. Today, the costs of the crisis have been transferred to the citizens of the European Union. In Poland, for example, there has been an increase in VAT which means that the cost of family maintenance has gone up.
The introduction of the tax on financial transactions will mean that action will be taken to limit the activity of so-called tax havens. In addition to its function of disciplining the financial sector, the monies which the European Union will be able to allocate for development from its own resources will be significant. More money in the European Union budget will mean more possibilities, more funding for science, education, investment in new technology, cohesion policy and the common agricultural policy.
Jaroslav Paška
(SK) Mr President, I agree with the rapporteur that the turbulence in the financial sector has resulted in serious problems not only for our citizens, but also for most of our businesses. It is therefore quite legitimate to debate an update to the regulations on handling the savings of European citizens in banks, insurance companies and other financial institutions.
However, one important conclusion of the debate should be to support the responsible and safe administration of the savings of our citizens, and to eliminate all speculative and risky transactions in which the savings or future pensions of small savers disappear into the pockets of speculators.
This should involve, first of all, better and more comprehensive regulations, which are accepted globally, and which would exclude speculation and gambling from the financial sector, without unnecessary damage to savers or clients. We should not talk about sanctions or special taxes until we have completed the thorough reform of our financial sector, which, unfortunately, commands little trust today.
Angelika Werthmann
(DE) Mr President, ladies and gentlemen, after the structural crisis - and I do not imagine that we have dealt with that yet by any means - it is essential that we secure a safe financial platform in order to limit speculation or, better still, to ban it entirely. Innovative financing instruments supplement the policy of cuts that is currently necessary and should be introduced worldwide as a matter of urgency. If we therefore vote in favour of a financial transaction tax at a rate of 0.05%, then we could have at our disposal potential revenue of nearly EUR 200 billion across the EU or even EUR 650 billion worldwide. At least equally positive is the potential it provides to regulate the financial markets and increase transparency. In other words, it is a step in the right direction.
Thomas Mann
(DE) Mr President, if we want to stabilise the financial markets, then a financial transaction tax is unavoidable. We need it so that we can put a stop once and for all to highly speculative excesses. The instability of the financial markets is due to short-term investment strategies and gambling on rates using a high proportion of debt capital. We need to make this kind of speculation unattractive and bring long-term investment strategies to the fore once and for all.
The tax will result in important revenues that we cannot do without in view of the costly EU safety nets. However, the tax rates also need to be set intelligently. The tax rate on lower risk securities must be lower than that on higher risk securities. The financial and banking systems may be organised differently around the world, but we need this financial transaction tax to gain global acceptance. It will make a substantial contribution to reducing the turbulence on the financial markets and will finally place financial transactions on a firmer footing.
Algirdas Šemeta
Member of the Commission. - Mr President, I would like, first of all, to thank you for this very interesting debate. Opinions are divided on the question as to whether the EU should envisage introducing a financial transaction tax at EU level as a first step.
The figures that are circulating might appear attractive. However, I am convinced that we should first evaluate the risk of relocation and the consequences of such a tax for European competitiveness. As you know, financial transactions are easily relocated outside the EU. Previous examples such as in Sweden have shown that the introduction of FTT at local level could harm legitimate businesses and erode the tax base to a large extent. This was very clearly illustrated by Mr Schmidt and Mr Hökmark.
As I said in my introductory speech, I would encourage you to wait for the results of the impact assessment in order to define a well-founded position in this area. I can assure you that this impact assessment will be conducted very thoroughly. You know that in February, we launched a public consultation on this subject. At the end of March, we will have the Brussels Tax Forum, which will be completely dedicated to the issue of financial sector taxation. We are working in close cooperation with academia and the IMF on this subject, which I would like to see analysed very seriously in order to make decisions based on solid foundations.
The issues at stake are very important, and many of them were raised during this discussion, such as the impact on high-frequency trading. We also have to analyse tax incidence. Some of you raised the question of who will pay the tax. There is no obvious answer here. We also have to analyse the cost of administration; we have to analyse tax bases and many other issues which have to be taken into account in order to make a final decision.
So I would like to ask you to wait until the Commission has finalised this impact assessment. We have committed ourselves to doing this by the summer break.
Otherwise, I welcome the report which globally supports the actions of the Commission in innovative financing, in particular, in the area of carbon tax, euro project bonds and development financing. Once again, I would like to thank Mrs Podimata for her excellent report, and I wish you good voting tomorrow.
Anni Podimata
Mr President, just a couple of words to summarise today's very interesting debate, for which I thank all the speakers.
First issue: a global or a European tax? I think that this is the wrong question or rather, I fear that this is the question being asked by those who do not want the tax at either European or global level, because we all know that it is impossible to reach global agreement unless someone takes the first step. In order therefore, to be credible and effective in this effort towards global agreement, the Union, which has the biggest financial market in the world, needs to take the first step.
Second issue: impact study. All of you who have read the report on innovative financing know that the impact study relates to a great many points in the report and we certainly need an impact study; no one disputes that. However, Commissioner, I cannot agree with you when you have asked us, you have begged us even now in your introductory statement, not to do anything, not to take a position before the European Commission's impact study has been published. I also worry that, with the stand you took a short while ago, it is as if you have already decided on your position, despite the fact that there is no impact study, despite the fact that we should not introduce a financial transaction tax at European level. Of course we need an impact study and we all know that this is the usual step before starting a legislative procedure. However, let us not hide behind impact studies and let us not betray our role and our remit, especially not at a time when we are fighting to defend the Community method, by which I mean the European Parliament's role in decision making. The political decision as to whether or not we want a European tax lies with us and the Council, as German chancellor Angela Merkel reminded us last week. We must make sure that we do not get overtaken by events.
(Applause)
President
The debate is closed.
The vote will take place at midday on Tuesday, 8 March 2011.
Written statements (Rule 149)
Ivo Belet
Today, the European Parliament is sending out a strong signal to the G20 but, in particular, to the European Heads of State or Government. We have always been, and remain, in favour of the introduction of a financial transaction tax at a global level, but if that cannot be achieved in the short term, then the EU should act independently to take its share of the responsibility. We are assuming that the Commission will shortly produce a study and, subsequent to that, a specific legislative proposal.
A financial transaction tax is the best tool for protecting against speculation in the markets and for financing global public goods. However, at the same time, it could also be an effective tool for supporting proactive economic recovery in Europe. At this juncture, I would also like to point out that those who always claim that the European integration project is an anti-social project could perhaps tone it down a little from today onwards. Because - in the words of Oxfam - 'The European Parliament is today setting a world standard by pressing for a European Robin Hood tax'.
Proinsias De Rossa
in writing. - I support this report, which calls for the EU to promote the introduction of a financial transaction tax (FTT) at global level, and failing that, as a first step, the EU should implement an FTT at European level. The spectacular rise in the volume of financial transactions in the global economy within the last decade, which, in 2007, reached a level 73.5 times higher than nominal world GDP, illustrates the growing disconnection between financial transactions and the needs of the real economy. The financial sector is under-taxed. Remarkably, no VAT is levied on most financial services. Measures must be implemented to raise more from this sector and contribute to shifting the burden of taxation away from working people. The main costs of the crisis have so far been borne by taxpayers. Financial institutions and stakeholders, which have enjoyed years of excessive returns on equities and excessive annual bonus payouts, must contribute their fair share to meeting the costs. It is estimated that a low rate FTT could yield nearly EUR 200 billion per year at EU level and USD 650 billion at global level, constituting a substantial contribution by the financial sector to the cost of the crisis and to public finance sustainability.
Kinga Göncz
In times of tight financial circumstances, we would be hard pressed to find any more obvious resources to fulfil joint European objectives than taxes imposed on financial transactions on an international or European level, the Eurobond, the EU project bond, and other innovative financial instruments. If we are serious about our resolutions and the objectives established in the EU 2020 strategy, then we must support the new financing instruments that allow us to achieve them. Fresh resources are necessary to develop energy and transportation networks, to fight climate change, and to finance steps aimed at achieving social inclusion. These resources should not put additional burdens on taxpayers who are already suffering the consequences of austerity measures. According to the opinion of financial experts, a financial transaction tax that reduces the level of financial speculation and excessive risk taking on the part of financial institutions - long advocated by the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament - can be introduced on a European level without driving out the financial sector from Europe. On an annual level, the 0.05% transaction tax would contribute EUR 200 billion to the budget. Additionally, other innovative financing measures, such as the issuing of Eurobonds, could also contribute to increasing budget revenues.
Cătălin Sorin Ivan
After having experienced the financial crisis, which demonstrated the volatility of the financial institutions' stocks, we considered it necessary to introduce a tax on financial transactions at European level, an issue which was also discussed extensively by the European Council.
The S&D Group, to which the designated rapporteur belongs, deserves most of the praise. We managed to send out a strong signal, especially by adopting the most problematic amendment, which aims to introduce the tax at European level, rather than globally. In this way, we show our good intentions and our firm belief that the measures can have a higher efficacy in the EU, with quantifiable and immediate benefits. In this regard, I must repeat that the austerity policy, promoted heavily by conservative governments, is deeply inequitable and even demagogic, especially since the economic crisis was not caused by ordinary people, but by the financial and banking institutions, which had an excessively liberal concept of the financial system. Resurgence should be considered in terms of equity and therefore, this tax is the best measure we have at hand.
Alfredo Pallone
This discussion is fascinating on an ethical, political and even technical level. The problem is that it cannot be played out on a fragmented field: the solution must be shared and agreed at G20 level, because if it is not implemented by everyone, it will become a boomerang, which would force financial transactions to relocate. We are not here to defend speculators or those who played the financial markets as though they were at a casino, but, on the other hand, we cannot take face-saving measures partly influenced by demagoguery, which then, in practice, go on to do more harm than we are setting out to prevent. Let us not, therefore, reason on purely ideological grounds and instead look at the facts. We all agree on the need to halt financial speculation for its own sake and to establish the principle that the polluter pays, but to do this, it is necessary to adopt an approach based on sound data, numbers and statistical analysis. We need to find a solution that takes into account the need to stop a certain type of speculation, and prevent the EU from back-pedalling on the global market, which would create more problems at a time when we need to invest and try to overcome the crisis.
