Here’s a piece of unadulterated good news: At a meeting of European Union finance ministers last week, eleven European Countries agreed to support a financial transaction tax. It’s the latest step in the truly heartening rise of a much-needed common sense reform. It’s high time that US progressives take heed, and draw inspiration.
“This tax unites Europe—from the people to the politicians, from the troubled economies of the Mediterranean to the more prosperous nations of the north,” e-mailed Owen Tudor, the head of EU and international relations for Britain’s Trades Union Congress (TUC). “Only fat cat financiers—and the politicians who work in their interests rather than the national interest—stand in the way, and across most of Europe, their objections are being brushed aside.”
I’ve argued before that a financial transaction tax is a win-win: raising revenue to avert austerity, while discouraging speculation to avert the next Wall Street-induced disaster. On this issue, fortunately, the momentum is all on the good guys’ side.
Last month, Congressman Keith Ellison introduced a great FTT bill for America. The news from Europe should strengthen its momentum, for reasons abstract and concrete. Sarah Anderson, the global economy director for the Institute for Policy Studies, argues that implementation in Europe can defang two of the primary arguments against a US FTT tax: just having it on the books there will debunk fears that a US equivalent would drive all of our trading activity to Europe. And when the European tax succeeds, it will be harder for critics to argue that such taxes can’t raise much money. Indeed, she notes, “the people who are responsible for estimating how much potential revenue there is” have said they “will actually revise their estimate upwards” if Europe implements its own first.
The eleven European countries on board surpass the nine-nation minimum for “enhanced cooperation” under EU rules. A similar number of countries have been voicing support for months, but campaigners had feared that disputes over issues like debt relief would sink a deal. While not Europe-wide, a coordinated eleven-country FTT would be a dramatic victory on policy and politics. (It also offers the EU a chance to better earn its new Nobel Peace Prize.)
There’s still work ahead: The plan needs the approval of a “qualified majority” of member nations, based on population. That means that nations who not be participating in the tax will still have a chance to derail it, if enough of them choose to. While the United Kingdom already has its own transaction tax, Prime Minister David Cameron hasn’t supported the EU plan, and could present an obstacle if he chooses to.