"Tobin Tax", continued

[Hinrich Kuhls <kls@xxxxxxxxxxxxxx>]

Today's leader in the German daily Frankfurter Rundschau -
http://www.fr-aktuell.de/ :
(for the respective FT article scroll to bottom)

Kanzler lobt Protestbewegung

Verständnis für Forderung der Globalisierungskritiker nach Spekulationssteuer

Von Hilmar Höhn

Bundeskanzler Gerhard Schröder (SPD) hat Verständnis für Proteste der
Globalisierungskritiker gezeigt. In seiner Grundsatzrede auf einer
internationalen Wirtschaftstagung der SPD in Berlin sagte der Kanzler, die
Politik müsse den friedlichen Protest ernst nehmen. Auch ging er auf die
Forderung der Globalisierungskritiker nach Einführung einer Steuer auf
Devisengeschäfte ein, wodurch spekulative Transaktionen unattraktiv gemacht
werden sollen.

BERLIN, 4. September. Schröder warnte am Dienstag zwar davor, den Blick auf
die Einführung dieser so genannten Tobin-Steuer zu verengen, zumal es
politische und rechtliche Schwierigkeiten gebe, diese Steuer zu
installieren. Er kündigte jedoch an, dass "ich mit unseren europäischen und
insbesondere französischen Partnern darüber reden will, wie wir auf die
relative Verselbstständigung spekulativer Finanzströme reagieren wollen".

[...]

Die Dachorganisation der Globalisierungskritiker Attac begrüßte, dass die
Bundesregierung mit Schröders Äußerungen ihre harte Linie gegen die
Tobin-Steuer "aufweiche". Das Thema steht auch bei dem Treffen der
EU-Finanzminister in drei Wochen in Lüttich auf der Tagesordnung.

full: http://www.fr-aktuell.de/fr/aktuell/t0000001L.htm [today] resp.
http://www.fr-aktuell.de/archiv/fr30t/h120010904001.htm [archives]

+++

Financial Times
<http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3G3HX08RC&live=true&tagid=FTDO9DHMZJC>

Schröder calls for debate on currency speculation
By Haig Simonian in Berlin and Tony Barber in Frankfurt
Published: September 4 2001 18:48 GMT | Last Updated: September 4 2001 22:11GMT

Chancellor Gerhard Schröder has called for Germany and France to lead a
debate on speculative international capital flows, thereby putting one of
the main demands of the anti-globalisation movement on the European
political agenda.

Speaking on the eve of an informal dinner in Berlin on Wednesday night with
French president Jacques Chirac and premier Lionel Jospin, Mr Schröder said
there was a need to recognise "weak spots" in the international financial
system, such as offshore centres, hedge funds and derivatives.

"So I want to discuss with our European and especially French partners how
we can react to these relatively autonomous speculative financial flows,"
he said. The chancellor stopped short of supporting Mr Jospin's recent
espousal of the so-called "Tobin tax". The tax, proposed by James Tobin,
the American economic Nobel laureate, would put a levy on turnover in
currency markets. The anti-globalisation movement has suggested the
proceeds of such a tax could be used for global poverty relief.

Addressing an international economic conference organised by his Social
Democratic party, Mr Schröder noted serious shortcomings with the Tobin
tax. "For example, how do you distinguish speculative financial flows from
those related to genuine trade finance?" he asked.

But the chancellor's comments, ahead of a meeting of EU finance ministers
in Belgium and a separate gathering of Social Democratic leaders in Sweden
this month, marked an important shift in Germany's willingness to recognise
the objections of the anti-globalisation movement.

Describing the Tobin tax as one of many instruments which could be used, Mr
Schröder said such issues needed to be discussed by Europe's finance
ministers "with all clarity".

Only last week, Hans Eichel, the finance minister, rejected the Tobin tax
on practical grounds at a meeting with Laurent Fabius, his French opposite
number.

Mr Schröder's remarks also contrasted with criticisms from Ernst Welteke,
the Bundesbank president.

In a speech prepared for delivery on Tuesday in Dublin, Mr Welteke said the
Tobin tax would come at too high a cost. "Foreign trade in goods and
services is bound to suffer as well. In the end, the wealth-enhancing
international division of labour will be hampered."

Mr Welteke said that, in times of economic distress, a Tobin tax would be
ineffective because profits from speculative capital movements would far
outweigh the cost of any sensible tax on transactions.

He also praised the increasing integration and liquidity of world financial
markets, saying this made them more attractive to international investors.

Mr Welteke made clear the Bundesbank regarded any attempt by governments to
"throw sand in the wheels of the foreign exchange market" as unrealistic.

The chancellor's remarks - and notably his clear distinction between
collectivist European social values and the more individualistic US ethos -
were also in line with his markedly greater emphasis on social issues of
late. With national elections only a year away, such themes, geared to the
SPD's core centre left supporters, have become increasingly prominent in
recent speeches.