The Germans and French agree again!
France and Germany have agreed plans for a transaction tax as part of a deal to set up a new “true European economic government” for the euro zone; but they demand that the tax hit the entire EU. A transaction tax—also known as a Robin Hood tax, because it targets rich traders—would see a small percentage taken from foreign exchange and share transactions.
But unless the same tax is imposed at the same time in all the world’s major markets, banks and dealers would simply leave the IFSC in Dublin and base themselves in New York, Tokyo or Hong Kong instead.
It’s worth remembering that the IFSC served as an international tax haven for half the world’s top fifty banks and half the world’s top twenty insurance companies. While Irish banks became indebted to the larger European banks, Ireland also channeled capital from those banks to other peripheral countries. Ireland became the fifth-largest lender in the world to Italy, Greece and Portugal and seventh largest lender in the world to Spain, exposing Irish banks—and now the Irish people—to debts of €5.1 billion to Portugal, €25.3 billion to Spain, €40.9 billion to Italy, and €7.8 billion to Greece.
Proposals for a tax on financial transactions are often referred to as a Tobin tax after the economist James Tobin, who suggested the idea in 1971. A Tobin tax has often been proposed as a method of transferring a small portion of the wealth of developed countries to the poorer ones—but not in this instance.People’s Movement · 25 Shanowen Crescent · Dublin 9 · www.people.ie · 087 2308330 · post (at) people (dot) ie The People’s Movement has launched a new pamphlet entitled The European Stability Mechanism and the case for an Irish Referendum.