Tell your head of government you have solutions !
The future of Europe, and our level of ambition for Climate and Jobs in next 7 years, may be decided in the next few days.
Let’s make our voices heard !
Just click on your head of government, send your tweet, and they will get the message !
How to agree on a sustainable recovery ?
On July 17 and 18, EU leaders will meet physically in Brussels to discuss the recovery plan to respond to the COVID-19 crisis and a new long-term EU budget.
This European Council meeting which gathers the heads of state and government of each EU country is a crucial moment to sustain a substantial and green Recovery Plan for Europe.
However, negotiations are currently blocked because some countries refuse to pay a higher contribution to the EU budget, and refuse common debt to be repaid together.
But one solution exists to make sure we can secure an ambitious and sustainable Recovery Plan: introducing new EU own resources to reimburse the EU debt and finance the European Green Deal.
A solution for a Climate&Jobs recovery !
By introducing new EU own resources, the EU will no longer need national budgets to contribute to its budget and it will be able to reimburse itself the debt taken upon during the Covid19 crisis.
When you bought the phone or computer you are currently using, you paid at least 19% VAT. And even for basic food items, even the most vulnerable among us have to pay 5.5% VAT. Everyone has to pay 5,5% VAT to contribute to the collective effort. But for those who buy shares on financial markets, the tax is currently 0.0%. How do we explain this 0.0% rate to the citizens? Are stocks and bonds even more essential to life than food?
This is why the EU should finance its Recovery Plan with a tax on financial transactions! The law is ready. By taxing only 0,1% stocks and 0,01% derivatives, we could collect every year over 50bn euros.
“Even after Brexit and in a crisis, Barroso’s FTT could raise 57 billion € / year”
The countries which are currently blocking the negotiation would accept an ambitious Recovery Plan if they knew how it will be paid back, without asking 1€ more from national budgets, nor from most citizens.
Germany, Denmark, Poland, Portugal, Italy, France… Very different countries seem ready to agree with this proposal. All EU countries which want to join the group supporting the FTT will have a solution to repay their share of the joint debt.
This is why we need you to call out to your national leader, and tell them you demand a Green and Ambitious EU Recovery Plan, financed with a tax on financial transactions!
What makes us think this could actually succeed ?
The German Development Minister Gerd Müller (CSU) said he supports a Financial Transaction Tax (FTT) that can raise 60 billion € per year. 10 times more than the digital tax or the plastic tax. He commissioned a study that showed, in March 2020, what a solid FTT looks like.
Angela Merkel said the FTT must be part of the solutions to fund the recovery. And the FTT is Identified as one of the priorities of Germany’s EU presidency in the program released on 1 July.
The German Finance Minister, Olaf Scholz, said in April that he sees an agreement in the « near future », and asked the Commission to open the FTT to more countries than the 10 which are currently negotiating it in enhanced cooperation. So each country can decide if they want to opt in to this solution to repay the recovery plan without spending 1 more € from their national budget.
Austria’s Finance Minister Gernot Blümel also criticized an FTT that would be too weak, that would not target high-frequency trading and derivatives. He warned that Austria could leave the group of countries currently working on a joint FTT if this weak proposal is pushed forward.
The FTT is a quite popular proposal in Europe (64% of citizens support it), in Germany (82%) and in a number of “frugal” countries. For instance in Denmark: 56% of the people support it, while only 37% oppose it.
The momentum for Round 3 on the FTT is now : After years of campaigning, a first FTT proposal was obtained. Poul Rasmussen, former Prime Minister of Denmark, was proud of the work achieved to, as he said, “win round 1 (Parliament) and 2 (Commission) to obtain support for the FTT, now let’s win round 3 in the Council”.
In 2020, when all our countries are looking for ways to find 20 billion € per year to fund the recovery, 50 billion € would be particularly welcome.
And other countries that were not part of the FTT group are moving: this year, for the first time, the Prime Minister of Poland wrote an opinion in the Financial Times supporting 3 resources, including the FTT.
If we convinced Barroso, we can convince Mark Rutte
In September 2011, the European Commission has proposed a Directive to create a small tax of 0.1% on financial transactions.
In all our countries, we pay a VAT of at least 15.5%. For basic necessities, even the most vulnerable must pay 5.5% VAT. But buying stocks on financial markets is taxed at a 0,0% rate.
How can we explain to citizens this 0.0% rate? Are stocks and bonds even more essential to life than water or food? Are these shares and bonds bought by people even more vulnerable than the families living on social benefits?
Could such a Financial Transaction Tax really raise revenues in the context of this current crisis? Yes. During this Spring of 2020 the European Economy is in a deadlock. The volumes traded in March-April 2020 were 45% higher than in 2010 (the year of reference for the figures of the Commission quoted below). In a time of crisis, volatility is high but traded volumes are high as well.
“EU Member States have committed € 4.6 trillion to bail out the financial sector during the crisis”, stated the European Commission on 28 September 2011. “The financial sector enjoys a tax advantage of approximately €18 billion per year because of VAT exemption on financial services. A new tax on the financial sector would ensure that financial institutions contribute to the cost of economic recovery and discourage risky and unproductive trading.”
Even after Brexit and in a context of crisis, a small tax based on this Directive could raise 57 billion € per year. 10 times more than the digital tax. The European Commission stated that this tax can be introduced in less than 2 years.
With 50 billion € every year, the Financial Transaction Tax (based on the proposal of the European Commission from 2011) can raise
(1) 20 billion to repay the Recovery Plan without taking 1 € more from national budgets and (2) invest 30 billion € every year in the green transition of Europe, battle that none of our countries can win alone, for a sustainable recovery based on making the green and digital transition succeed.