Christian Noyer, governor of the Bank of France, said the FTT posed a very
real “risk” to the economy if not implemented correctly. France was one of a
splinter group of 11 European Union countries to decide to press forward
independently with a so-called Tobin tax earlier this year. The UK has opposed the move, which Sir Mervyn King, Bank of England Governor,
said earlier this month does not even have the unqualified backing of the 11
members adopting the levy. He claimed there was “enormous scepticism” even among
politicians in countries signed up to it, adding that he could “not find anyone
within the central banking community who thinks it is a good idea”. Mr Noyer’s comments appeared to confirm Sir Mervyn’s analysis. Mr Noyer, who
is also on the European Central Bank board, said: “It will be essential to
define the base, interest rates and scope of a possible financial transaction
tax in order to prevent the risk of destroying entire segments of our financial
industry or the offshoring of jobs, as well as the highly counterproductive
effects on government borrowing and the financing of the economy.”
Under the current plan, a 0.1pc levy would be charged on equity and debt
transactions and a 0.01pc tax on derivatives. Germany, France, Italy and Spain
are among those that have agreed to the plan, which the European Commission
expects will raise €35bn (£30bn) a year and hopes will be in force by 2014.
To prevent business moving abroad, the FTT carries an “extra-territoriality”
clause that would see the levy imposed on any euro-denominated transaction, even
in countries that are not signed up to the FTT. The UK is challenging the
decision in the European courts, and the US and other countries have vowed to
block it – which would almost certainly make the FTT unworkable.... Well...
Monsieur Noyer .... most of us (being of sound mind if not body) have been
saying this since the idea was first mooted. The concept of a financial tax
applying only to Europe is hilarious. The progenitors must have shares in
Singapore, NY and Shanghai.
It is of course barmy. All the French political elite knows how to do is
impose more taxes. I am astonished theyhaven't yet got their grubby hands on
e-mails! Imagine that - a 1p tax on all e-mails .... that would allow them for a
while to continue with their insane spending before running out of money agfain
and looking for another Milch Kuh..... Even the French socialists couldn't tax
sex, could they?But better late than never, Mr Noyer, and GOOD LUCK with passing on your
message to your President .... however, given A) his reception to new ideas and
B) his general understanding of what is going on, I am not that optimistic. No,
I'll rephrase that; you are belching into the face of a hurricane ....
3 comments:
EC to ease austerity focus
The European Commission is expected to formally shift its focus away from austerity and in favour of growth later today, when it publishes its annual review of the national budgets of all 27 EU members.
The EC is expected to give three of its largest countries, France, Spain and the Netherlands, more time to bring their deficits down to the 3% target.
They'll be encouraged to reshape their economies, open up their labour markets, and implement structural reforms, but the underlying message will be that the pace of fiscal consolidation can be slowed.
As one official put it to Reuters:
The main message will be that the emphasis is shifting to structural reforms from austerity.
That is likely to mean two-year extensions for both Spain and France, giving them until 2015 to cut their annual borrowings below 3% of national output. The Netherlands is expected to get 12-months grace.
The EC will probably argue that the move is justified because the threat of a eurozone break-up has faded away. But opponents of full-blooded austerity could also take heart that the pendulum has swung, finally, in their favour.
The EC won't abandon its push for reform, either. Instead, it is likely to criticise a number of governments for failing to implement reforms quickly enough. Francois Hollande's government could be singled out.
As the FT puts it:
Brussels is expected to criticise several governments for their slow pace of reform and will demand immediate action by several it believes are at risk of prolonged economic stagnation. These include France, where senior officials in Brussels and Berlin believe time is running out for sufficient labour and economic reforms.
Italy, though, is likely to be freed from the EC's excessive deficit procedure, having cut its annual borrowing below 3% of GDP.
The US government's much-anticipated auction of $35bn of five-year bonds appears to have gone smoothly.
The debt was all sold at yields of up to 1.045%, which Reuters says was in line with market expectations. The bid-to-cover ratio was 2.79, which means total bids were almost three times as large as the amount of debt on offer.
And US 10-year Treasury bills are rising in value since the auction results hit the newswires – suggesting it has been well received.
Since the 1980s and the US and UK taking on neo-liberal economic ideas their rich have just got richer and richer and richer and the majority have have their wealth asset stripped by those policies or it has stagnated.
Everyone felt they were rich in the 90s and 2000s because house prices were going up because the bankers were loaning to anyone - that of course was untenable and the 2008 crash put a stop to that, but QE has kept house prices up - without QE there would have been a proper crash and house prices would have come down 35% - 40%.
QE at £400 BILLION in the UK and $1 TRILLION in the US is actually showing how much those economies shrunk by.
But this is utterly dwarfed by the use of tax havens. Since the 80s $23 TRILLION has been taken out of world economies and put in tax havens - an issue 10 times bigger than QE.
Taxation on this would for pay off the deficits in the EU AND the UK or slice almost 3/4s of the $16 TRILLION deficit in the US.
It is, under these circumstances, a shining light on Osborne's and any other policies of Austerity (though Greece, Italy and Spain are different issues) - he is trying to pay back QE through austerity measures on the majority whilst the rich carry on untaxed.
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