British Labour Prime Minister Gordon Brown has come out in favour of a global financial transactions tax. Speaking Saturday in Edinburgh (his home base) to a G20 Finance Ministers meeting on the subject of bank bailouts Brown said "it cannot be acceptable that the benefits of success in this sector are reaped by the few but the costs of its failure are borne by all of us."
France, under both the former and current presidents, has supported the adoption of a "Tobin tax" on financial transaction. Earlier this year the British Financial regulator came out for such a tax. The G20 agreed to have the IMF investigate "options of how the financial sector could contribute to paying for the burdens associated with government interventions to repair the banking system." The IMF are to report in April.
The tax is opposed by the U.S. Treasury, and in Edinburgh the Canadian Finance Minister James Flaherty echoed that opposition. The usual excuses given for opposition to the tax are that all nations would have to agree in order for it be implemented, and that it is administratively difficult to apply. In fact it is easy to apply. All financial institutions already charge fees on financial transactions. The tax could easily be applied and collected by them on top of their fees. The only nation that would have to agree to a Tobin tax is the U.S. Once it signed on, all other opposition could be eliminated through making the tax an integral part of state membership in international organizations such as the UN, the WTO and the IMF, and punishing financial institutions severely for non-compliance, regardless of any national legislation exempting them from the tax.
Hedge Fund manager, currency speculator and financial guru George Soros supports a Tobin-style tax. He sees it as an important in putting into place a new global financial architecture. The current structure, Soros is convinced, is broken and needs to be re-invented.
While the Canadian government turns its back on needed changes to international finance, a centre-right regime in France supports such change, and domestically is debating a major new program of public investment underwritten by a major loan.
Called "le grand emprunt" or big loan, the government of Nicolas Sarkozy has appointed a commission co-chaired by two former prime ministers, the Socialist Michel Rocard, and the Gaulist Alain Juppé to determine the amount needed for new public infrastructure investment. A group of 63 rightist National Assembly "deputies" have written an open letter published by Le Monde newspaper calling for a public loan of up to 100 billion Euros and to exceed an amount of 50 billion Euros. The French president had talked about a ceiling of 50 billion Euros, and the commission which will report shortly is expected to suggest less than 50 billion. All parties to the debate within the right agree that France needs to borrow and spend so as to face the future with modern research facilities, better Universities, more green industry and transport, higher quality health infrastructure and highly adapted public services.
In Canada the right looks askance at any form of government spending other than for the military or law enforcement; taxes are considered sinful; and government borrowing, though preferred to tax increases, is never undertaken expressly to fulfill specific public purposes. Governments are believe incapable of such far-sighted action.
In France, the public expects governments to act strategically, and think ahead. Public reason is considered a Republican virtue by both the right and the left, and government is held to be an competent agent, acting on behalf of the nation at large.
For those used to the Canadian Conservative version of American right-wing discourse, it will come as a shock to hear the French right argue for a Tobin tax alongside a British labour prime minister, and dispute among themselves just how many tens of billions of Euro the French state needs to invest to ensure a better future for its citizenry.
Duncan Cameron writes from France.
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