31 Jul 2014

Green financial news

Stories from Molly Scott Cato and Natalie Bennet...
copyright Russ
Molly Scott Cato, Green MEP for the South West, has used her position on the European Parliament’s Economics and Monetary Committee to bring further pressure to bear on George Osborne to accept a plan to impose a tax on bankers and financiers.

The Financial Transaction Tax (FTT), otherwise known as a Robin Hood tax, is a tiny tax of about 0.05% on transactions made by banks, hedge funds and the financial sector but could raise billions of pounds a year for social and environmental initiatives. Chancellor George Osborne remains firmly opposed to the FTT tax and even attempted a legal challenge which was rejected by the European Court of Justice some weeks ago.

Molly questioned Italian Finance Minister, Pier Carlo Padoan, at a committee meeting. Support from Minister Padoan and the Italian government is crucial as they currently hold the EU Presidency of the European Council and will set the agenda for Europe-wide reforms until the end of the year. Molly said:

“As Greens we are keen to see Europe's banks working in the interests of all and not in the narrow self-interest of creditors, shareholders and Osborne’s chums in the City. That’s why we are strong supporters of a Financial Transactions Tax which will make funds available to be invested for the public good. I sought reassurance from Mr Padoan that he will seek to broaden support for the FTT during the Italian presidency.”

Ten member states have agreed to implement the levy by the beginning of 2016 but the details of exactly how it will work have yet to be agreed. Greens are pressing for member states to avoid loop holes and any watering down of proposals and are seeking a much broader based FTT to include all derivatives, particularly credit and interest rate derivatives. Molly concluded:

“It is clear that Mr Padoan supports the idea of a FTT but he didn’t make it clear whether he would apply pressure on Cameron and Osborne to sign up to this. I am encouraged by the number of European countries that see this as an important measure and Osborne and his banking cronies are increasingly isolated in their opposition to this popular tax. Greens will continue to keep pressure up on the UK government and in the European Parliament to support a tax that will work for the common good.”

Meanwhile,closer to home amidst the flurry of data, reaction and charts, we haven't really touched on the wider question -- whether GDP is a good measure of economic well-being at all. Natalie Bennett, Green Party leader, has now flagged up some of the key concerns. One is the continued importance of Britain's financial sector, nearly years after the collapse of Lehman Brothers. As Bennett warns that the UK economy remains unbalanced: With the International Bank of Settlements, among many others, warning about the continued extreme fragility of the international financial sector of which the City of London is a notable risk-heavy and fraud-laden part, with an economy in which 20% of workers are on less than a living wage, millions working fewer hours than they'd like and households struggling to meet basic bills, there's no sign of real economic change.The Greens argue that Britain's "broken economic model" needs to change, with less focus on consumption and less power for multinationals.

"Today it's important to re-state that we need to transform it so that it works for the common good, not for the good of the few, within the limits of our one planet.We need to bring manufacturing and food production back to Britain, restore strong local economies built on small businesses and cooperatives. That means forcing multinational companies to behave like decent corporate systems - paying their way with tax and decent wages and conditions, and reining in our financial sector. And we need a massive cut in our use of the limited physical resources of this planet, along the lines of, but going much further, than that proposed this week by the Environmental Audit Committee report on the circular economy."

That report, warned that the government isn't giving enough leadership on the issue and that Britain could learn a lot from Japan.

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