NEWSLETTER: MAY 2010
NEW COMMON DECLARATION OF EUROPEANS FOR FINANCIAL REFORM COALITION
In the aftermath of the first shocks that hit the global financial system in 2007, international momentum for radical reform of the financial system appeared to have been reached with the 2009 G20 summits in Pittsburgh and London. Progressive forces believed in the imminence of a critical rethinking of three decades of pure financial neo-liberalism. But now, nearly three years after the subprime crisis, conservative governments have shown that they are slipping back into bad old habits. Progress on reforming global finance has been much too slow. In this context, Europeans for Financial Reform (EFFR) urge European institutions and G20 leaders to renew their effort towards achieving the long overdue financial reform. To read the full declaration, click here.
FINANCIAL TRANSACTION TAX CAMPAIGN QUOTES
Martin Schulz, S&D President: Taxing the financial sector is a matter of fairness and social justice!
Poul N. Rasmussen, President of the Party of European Socialists: It’s time for everyone, especially speculators, to pay their share, so that we can finally say, this time we learned the lessons of the crash.
For more quotes and more photos, click here!
FINANCIAL REGULATION WATCHDOG
Strengthening the supervision of financial markets to avoid new crises
Last week in the European parliament, MEPs of the Green and PES parties, both part of the coalition backed new measures to strengthen the supervision of financial markets in view of a vote taking place next Monday in the European Parliament's economic committee. In this regard, S&D group spokesman Udo Bullmann said: "We want the EU to have the tools for anticipating and managing new systemic crises as witnessed with the collapse of Lehman Brothers. Regulation and supervision are two sides of the same coin. Peter Skinner and Antolin Sanchez Presedo, the two S&D Euro MPs leading the negotiations stated: "We need strong and independent supervisory authorities and a system in which financial supervisors work hand-in-hand at both national and European level. It will be built on the work of three existing European sector committees and involve the creation of a European Systemic Risk Board. As a new watchdog for all sectors of financial markets, the ESRB should have the power to assess the risk of a systemic crisis and its contagious effects. It should include independent experts and fewer central bankers and should be chaired by the president of the European Central Bank. The European supervisory authorities should also have supervisory powers over financial institutions. They should be able to settle disagreements among supervisors through binding decisions. This is crucial if we are serious about supervision."
The S&D group supported a European bank deposit guarantee fund to protect private savings across the EU and a stability fund financed according to systemic risk to ensure the full internalisation of costs caused by future bank and financial market crises.
Europeans for Financial Reform Conference on the financial transaction tax
In the last two weeks, we witnessed positive developments at EU level. The supervision compromise has been voted and is a strong signal to the Council. The fact that the financial transaction tax appears in the Council conclusions is very positive. As for the Eurozone mechanisms, (new stabilisation fund and European monetary guarantee), overall, the mechanisms are much more in line with proposals formulated by the European left parties. The ECB is now buying sovereign debt and this might be a first step before creating Eurobonds.
However, the proposed system would need improvement and progressive forces are now calling for social consolidation, rather than fiscal consolidation, and for a real EU mechanism. Regarding the last two paragraphs of the Ecofin conclusions on fiscal discipline, some wonder when the conservatives will learn the lesson. We know fiscal consolidation means cuts in expenditure including in social expenditure, while we do not need fiscal consolidation but social consolidation. We must also be careful not to rush into a one-size-fits-all approach: some countries have revenue problems in terms of tax evasion and are not collecting corporate taxes adequately, while others have expenditure problems due to high unemployment. As many EFFR coalition partners have stressed, we should focus fiscal consolidation on the tax revenue side rather than on the tax expenditure dimension. And last but not least, the proposed stabilisation system is done on a bilateral basis and therefore looks more like a nation bailout.
EFFR PARTNERS NEWS
Latest PES press releases on the issue:
Spanish EU Presidency brings Finance Ministers round to PES crisis recovery plan, but conservative backlash risks imposing “accelerated” public budget cuts. PES Economic and Finance Chair Andreas Schieder welcomes ECOFIN decision to put Financial Transaction Tax back on the table. Statement by Poul Nyrup Rasmussen, President of Party of European Socialists to ECOFIN meeting of 9 May
Latest ETUC Press releases on the issue:
ETUC press release on the Council and following their expectations for the Council
Other interesting links :Prof. Stiglitz on Greece and Prof. Krugman in NYT -
WEB CAMPAIGN : TAKE ACTION!
Promoting the financial transaction tax through the Video "Vandal Bankers"
To promote the Financial Transaction tax, a video featuring a vandal banker has been produced. It is now up to you make the best out of this campaign video!
To watch the video, click here.
To promote the Vandal Banker Video, click here.
Joining and promoting our Facebook Group and our website:
We invite you to join us on Facebook and to promote the Europeans for Financial Reform website.
EFFR EVENTS TO COME
Seminar - Taxing Financial Markets: alternative mechanisms and objectives
May 28, 2010 – Madrid, Spain
Organised by: IDEAS Foundation
International speakers will include, among others, Prof. Joseph Stiglitz and Prof. Jeffrey Sachs, Columbia University, Dr. Stephan Schulmeister, Austrian Institute of Economic Research (WIFO), Prof. Stephany Griffith Jones, Columbia University, Dr. Y Venugopal Reddy, and Former Governor of the Reserve Bank of India. For more information, please check our website regularly.