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EU Lawmakers OK Podimata Tax

PodimataThe European Parliament has voted for a proposal put forth by a PASOK Socialist lawmaker, Anni Podimata, for a tax on currency exchanges and financial transactions she said would deter speculators.

The so-called Tobin Tax is named for Nobel Prize winner James Tobin, who first recommended the idea, to be 1 percent or less, in 1972, when the Bretton Woods system of money management worldwide changed.

Podimata, who is also a Vice-President of the European Parliament, said it should be extended to all financial transactions and that is was necessary to prevent speculators from manipulating markets and government economies, especially those such as Greece that need bailouts and other assistance.

Some countries, particularly the United Kingdom, whose economies depend on the financial sector, have strongly opposed it, believing the tax would just force investors to move to countries who don’t impose it.

The Parliament voted 533-91, with 32 abstentions, in favor of the tax. Podimata said later that, “The tax on financial transaction gives to the citizens of the North and the South who have carried the cost of the financial services a message that their efforts are not in vain.”

She said the tax was an issue of social responsibility to make the financial sector contribute to the cost of the rescue packages it has from which it has benefitted and to slow a rise in Euro-skepticism and nationalism.

The tax faces another hurdle though as it must be approved by the 27 leaders of the European Union who make up the European Council, and the European Commission but Parliament officials said it could be put into practice in 11 countries initially, including Greece, as well as France, Germany, Belgium, Austria, Portugal, Slovenia, Slovakia, Italy, Spain and Estonia.

(Source: European Parliament)


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