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Restoring social justice through a tax on financial transactions

Motion for a resolution | Doc. 12759 | 06 October 2011

several Assembly members
Mr Luca VOLONTÈ, Italy, EPP/CD ; Mr Márton BRAUN, Hungary, EPP/CD ; Mr Carlos COSTA NEVES, Portugal, EPP/CD ; Mr Arcadio DÍAZ TEJERA, Spain, SOC ; Mr József ÉKES, Hungary, EPP/CD ; Mr Tuur ELZINGA, Netherlands, UEL ; Ms Pernille FRAHM, Denmark, UEL ; Mr György FRUNDA, Romania, EPP/CD ; Mr Jean-Charles GARDETTO, Monaco, EPP/CD ; Mr Valeriu GHILETCHI, Republic of Moldova, EPP/CD ; Mr Andreas GROSS, Switzerland, SOC ; Mr Andres HERKEL, Estonia, EPP/CD ; Mr Jim HOOD, United Kingdom, SOC ; Mr Ferenc KALMÁR, Hungary, EPP/CD ; Mr Tiny KOX, Netherlands, UEL ; Mr Dirk Van der MAELEN, Belgium, SOC ; Mr José MENDES BOTA, Portugal, EPP/CD ; Mr João Bosco MOTA AMARAL, Portugal, EPP/CD ; Mr Gábor Tamás NAGY, Hungary, EPP/CD ; Mr Pieter OMTZIGT, Netherlands, EPP/CD ; Mr Christos POURGOURIDES, Cyprus, EPP/CD ; Ms Maria STAVROSITU, Romania, EPP/CD ; Mr Latchezar TOSHEV, Bulgaria, EPP/CD ; Mr Egidijus VAREIKIS, Lithuania, EPP/CD ; Mr Imre VEJKEY, Hungary, EPP/CD ; Mr Emanuelis ZINGERIS, Lithuania, EPP/CD

Financial institutions have been heavily criticized for being disconnected from the real economy. For instance, the United Kingdom Financial Services Authority chairman Adair Turner, has described the financial sector as being largely "swollen and useless".

World trade in currencies is now worth 70 times the trade in goods and services, meaning that most transactions have little connection to real trade. In fact, it is taxpayers who have footed the bill for many of the most complex financial derivatives created, with the most notable example being the 2008 US Government absorption of AIG’s liabilities accruing from subprime and credit derivatives.

Many countries already have successful, unilateral financial transaction taxes in place, according to a March 2011 report by the International Monetary Fund – including the United Kingdom, Taiwan, India, Switzerland, South Africa or South Korea. For a level playing field a harmonised financial transaction tax is desirable.

The Parliamentary Assembly, as an enlarged OECD Assembly, should do research into a common financial transaction tax, to be implemented in the OECD, G20 and Council of Europe countries, or a subset thereof, to raise revenue and restore the financial sector to a healthier size.