51K0088 | Demobel

Projet de loi instaurant une taxe sur les opérations de change de devises, de billets de banque et de monnaies.

Summary ¶

(From the official documents)

Les auteurs estiment que les activités des spéculateurs ont un important effet déstabilisant sur les pays dont la monnaie fait l’objet de cette spéculation.

Afin de combattre ce phénomène, les auteurs proposent une alternative à la “taxe Tobin”, à savoir la “taxe Spahn”. Contrairement à cette première taxe, cette taxe comporterait deux niveaux de perception: un taux très faible de 0,01 ou 0,02%, qui s’appliquerait à toutes les transactions, et un taux de 80%, qui s’appliquerait dès que le taux de change de la monnaie concernée sortirait d’une marge de fluctuation prédéterminée.

Les auteurs se fondent, pour instaurer la “taxe Spahn”, sur la sixième directive européenne en matière de TVA, étant donné que plus de quatre-vingts pays recourent à la technique propre au régime de la TVA. Cette taxe n’est cependant pas une taxe sur la valeur ajoutée, mais est perçue sur le montant brut de l’opération de change.

Les auteurs souhaitent que le produit de cette taxe levée dans les pays de l’Union européenne soit versé à un fonds créé au sein de l’Union européenne, pour être affecté à la coopération au développement, à la lutte contre l’injustice sociale et écologique et à la préservation des biens publics internationaux.

Cette taxe entrerait en vigueur au plus tôt le 1er janvier 2004, à condition que la possibilité de l’instaurer soit prévue dans la législation de tous les pays de l’eurozone.

General information ¶

Authors: CD&V Nahima Lanjri
Ecolo Gérard Gobert
LE Jean-Jacques Viseur
PS | SP Jacques Chabot, Karine Lalieux
Vooruit Geert Lambert, Dirk Van der Maelen
Submission date: July 15, 2003
Official page: Visit
Status: Adopted
Requirement: Simple
Subjects: tax development aid exchange transaction

Voting ¶

Voted to adopt: CD&V Vooruit Ecolo LE PS | SP
Voted to reject: Open Vld FN VB
Abstained from voting: N-VA MR

Party dissidents ¶

François-Xavier de Donnea (MR) voted to reject.

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Discussion ¶

July 1, 2004 | Plenary session (Chamber of representatives)

Full source

Nahima Lanjri CD&V ⚙

Collega's, gezien het gevorderde uur en ook gezien de lijst van sprekers die ingeschreven zijn, zal ik het kort houden. Ik wil ook niet in herhaling vallen.

Het debat over het invoeren van de taks op speculatieve kapitaalstromen is een debat dat reeds lang meegaat, namelijk al meer dan vijf jaar. Het is echter nog zeker niet afgesloten. Ook vandaag zal het niet worden afgesloten.

De NGO-wereld pleit al jarenlang en wereldwijd voor de invoering van de Tobin-taks. Vandaag zetten we hier in België een belangrijke symbolische stap door het goedkeuren van het wetsvoorstel, dat een alternatief is voor de Tobin-taks, namelijk de Spahn-taks.

Uit de debatten is gebleken dat het heffen van zo een taks geen technische problemen doet rijzen. De vermoedelijke opbrengst van zo een taks wordt geraamd op meer dan 50 miljard euro. Dat is een heel bedrag, dat zou moeten worden aangewend voor de verdere uitbouw van de ontwikkelingssamenwerking, voor de strijd tegen de sociale en ecologische onrechtvaardigheid en voor het behoud van internationaal-publieke goederen. Dat is een nobel doel, dat daarom onze volledige steun verdient.

Door tegenstanders van de Tobin-taks wordt vaak beweerd dat een dergelijke taks niet realistisch is. De debatten hebben nochtans het tegendeel aangetoond. Dat vinden we ook terug in het wetsvoorstel. Belangrijk daarin is dat de taks slechts kan worden geheven op voorwaarde dat alle landen van de eurozone op één lijn zitten en dus een dergelijke wetgeving tot stand brengen of wanneer er een algemene, Europese regelgeving van kracht zou worden. België en de andere EU-lidstaten hebben natuurlijk in deze materie hun soevereine belastingbevoegdheid behouden. Die zullen ze ook blijven behouden. De Hoge Raad voor Financiën zegt dat het allicht zo is dat alle landen uit de eurozone op één lijn moeten zitten. Dat is een heel realistische benadering, die trouwens ook in het wetsvoorstel is ingeschreven. Daarmee kunnen we dan ook volledig instemmen.

Over de effectiviteit van de Spahn-taks om speculatie tegen te gaan, waren de meningen van de gehoorde experts verdeeld.

De CD&V-fractie steunt het wetsvoorstel. Ik wil echter ook wijzen op de opmerking die de heer Bogaert reeds in de commissie heeft gemaakt. Hij heeft benadrukt dat we wel bekommerd moeten zijn om de eventuele gevolgen van een grotere, fiscale druk. De belastingdruk in België is nu reeds heel hoog, zeker in vergelijking met de rest van Europa. Als ooit op Europees vlak de Tobin-taks er komt, zal het in elk geval belangrijk zijn dat daardoor de belastingdruk in België niet nog meer stijgt. We zitten nu al boven het gemiddelde van de andere landen. Wanneer de Tobin-taks er komt, moet in België ook worden nagedacht om deze te compenseren door een afschaffing of een vermindering van andere taksen. De CD&V-fractie blijft immers ijveren voor een lagere, globale belastingdruk, tot op het niveau van onze buurlanden. Dat is een gezond uitgangspunt en dat blijft ook ons uitgangspunt.

Zoals reeds bij het begin gezegd, zullen we het wetsvoorstel dat ik ook namens de fractie mee heb ondertekend uiteraard volledig steunen, ook omwille van de heel positieve effecten op het vlak van ontwikkelingssamenwerking. Wij mogen evenwel niet berusten bij het wetsvoorstel. Wij weten dat het werk nog niet af is.

Minister Reynders is aanwezig is en ik hoop dat hij luistert want ik verzoek de regering om op Europees vlak werk te maken van de invoering van de Tobin-taks. Pas als het op dat vlak wordt gerealiseerd kunnen wij in België ons steentje bijdragen. Ons land kan een voortrekker zijn om een Europese regelgeving tot stand te brengen.

Rapporteur Marie-Christine Marghem ⚙

I refer to this in my written report.

Nahima Lanjri CD&V ⚙

Colleagues, given the advanced hour and also given the list of speakers enrolled, I will keep it brief. I also do not want to fall into repetition.

The debate about the introduction of a tax on speculative capital flows is a debate that has been going on for a long time, namely for more than five years. However, it is ⁇ not yet closed. It will not be closed today either.

The NGO world has been advocating for years and globally for the introduction of the Tobin tax. Today, here in Belgium, we take an important symbolic step by approving the bill, which is an alternative to the Tobin tax, namely the Spahn tax.

The debates have shown that the imposition of such a tax does not raise technical problems. The expected income from such a tax is estimated at more than 50 billion euros. That is a whole amount, which should be used for the further expansion of development cooperation, for the fight against social and ecological injustice and for the preservation of international public goods. This is a noble goal, which therefore deserves our full support. Opponents of the Tobin tax often argue that such a tax is not realistic. However, the debates have demonstrated the opposite. This is also reflected in the bill. Importantly, the tax can only be levied on condition that all countries of the euro area are on the same line and thus adopt such legislation or when a general European regulation would come into force. Of course, Belgium and the other EU Member States have ⁇ ined their sovereign tax competence in this matter. They will continue to preserve them as well. The Supreme Council for Finance says it is likely that all countries in the eurozone should be on the same line. This is a very realistic approach, which, by the way, is also included in the bill. We can therefore fully agree with this.

On the effectiveness of the Spahn tactic to counter speculation, the opinions of the experts heard were divided.

The CD&V group supports the bill. However, I would also like to point out the comment that Mr. Bogaert has already made in the committee. He stressed that we should be concerned about the possible consequences of a greater, fiscal pressure. The tax burden in Belgium is already very high, ⁇ compared to the rest of Europe. If the Tobin tax ever comes in Europe, it will in any case be important that it does not increase the tax burden in Belgium. We are already above the average of other countries. When the Tobin tax is introduced, it should also be considered in Belgium to compensate for it by abolishing or reducing other taxes. After all, the CD&V group continues to strive for a lower, global tax pressure, up to the level of our neighbors. That is a healthy starting point and it remains our starting point.

As stated at the beginning, we will of course fully support the bill — which I also signed on behalf of the group — also because of its very positive effects in the field of development cooperation. However, we cannot rely on the bill. We know that the work is not yet finished.

Minister Reynders is present and I hope he will listen because I call on the government to work on the introduction of the Tobin tax at the European level. Only if it is realized in this area can we contribute a little in Belgium. Our country can be a pioneer in creating a European regulation.

Karine Lalieux PS | SP ⚙

At the end of the year 2000, a motion calling for the establishment of the Tobin tax was voted in the Senate. At the same time, parliamentarians from all sides of the two assemblies began regular, ⁇ instructive exchanges with civil society advocating this tax. These numerous work and meetings eventually resulted in a common bill that we are discussing today. Four years, therefore, would have taken four years, divided over two legislatures, before the legislative work around the introduction of a tax on speculative capital movements came to an end.

This period of time could be presented as a sign of the slowness of our institution. I prefer to see in this achievement an encouragement to continue our struggle. Parliamentary work teaches us that sometimes you need to know how to show patience to advance a case. We have to be persistent, and we did. This day is also for us and for all those who have supported us – and I thank them – the reward of many years of work.

Today’s vote gives us the opportunity to become the first country in the world to have a law introducing a tax on international financial transactions. In this regard, the Belgian vote is awaited with impatience in the other countries of the euro area. The text we are examining is considered to be the most successful in this regard. Several European contacts confirm that this will be the case and that it already serves as a reference to parliamentarians and associations who are fighting for the introduction of a Tobin-Spahn tax in other European countries.

My purpose here is not to draw up a history of the various events whose vote today is the outcome. The discussions around this text were numerous, always instructive in the presence of prominent specialists. The arguments of the supporters and opponents were, one by one, put on the table and carefully analyzed by us.

The technical feasibility of the measure, already recognized by the Supreme Council of Finance in June 2001, is no longer the shadow of doubt. We are now facing a political choice that we will make. The economic growth that the world has experienced since the 1980s has probably obscured the need to regulate international financial markets. It can be said that even today, the belief of some in the ability of the market to self-regulate and to function at the best of common interests is still rigorous.

The 1990s cruelly confirmed the need to combat excessive fluctuations in capital markets. Indeed, remember, before Europe was endowed with a single currency, the French currency was the subject of a regular attack by speculators. France will lose all its dollar reserves in eight days. Even more seriously, the frenetic speculation on currencies and fragile economies plunges Southeast Asia into chaos, into the marasme of which some are still trying to get out. The same cause producing the same effects, there is no shadow of doubt that such crises will repeat if we let the financial world self-regulate.

The circulation of capital, like that of goods and services, must be encouraged as it is the source of growth and progress. However, we cannot accept the movement of capital for the movement of capital. Financial circulation must be profitable to a sustainable economy and, therefore, enter into a certain stability. by

The proposal to introduce a tax on capital movements in its Spahn version is a first response to excessive speculation on the financial markets. The introduction of a very small tax does not penalize transfers related to the real economy. With the proposal as it is formulated, a transfer of a value of 10,000 will be taxed only by 2. This amount is lower than the amount requested from an individual when he wishes to exchange currencies himself. Therefore, there is no reason to think that such a tax would penalize the sustainable economic development of a country. In the same order of ideas, some advance that the introduction of such a tax would cause our ⁇ to run away. Let’s be realistic, the cost of a relocation is much higher than a tax of 2 per 10,000.

Only 4% of the transactions concerned have a direct relationship with the real economy in the form of exchange of goods and services.

In contrast, the 81% rate provided for in the proposal explicitly aims to penalize financial movements that can jeopardize the financial balance of a country and thus destroy very quickly any development capacity. The political choice we are making today is that of better control over the financial movements. It is also a realistic choice because we do not want this choice to be made without our main economic partners. Indeed – it has been said – the entry into force of the proposal we are called to vote on is conditional on the introduction of the same type of legislation throughout the euro area.

For the Socialist Party, in addition to its corrective role in relation to excessive speculative behavior, the Spahn tax presents another advantage: that of targeting the financial masses that are currently tax-free and which occupy a considerable place in the economy. For the PS, the implementation of a tax on capital movements allows a beginning – and only a beginning, Mr. Minister – of re-balancing the taxation that weighs on labour towards capital, i.e. a greater solidarity between the factors of production.

As representatives of the financial world have explained to us during our hearings in the Globalization Committee, this financial movement plays an important role in the economy. We are also convinced of this. These movements are creators of values. As such, they must be taxed. They must be so much more so as we witness, since the late 1970s, an extremely rapid growth in the volume of financial transactions. This volume was estimated at $20 billion in 1978. It is currently valued at $1,500 billion per day. There is a tax deposit that, according to the most reasonable projections, would be equivalent to the amount currently allocated to development aid by the main donors – approximately 50 billion euros.

This largely insufficient development aid, we have repeated, and which, in addition, tends to decrease with time – the World Bank says it every day – is yet a major challenge. The development of the rest of the world is an essential component in the sustainability of our own societies. We therefore find a third argument that allows the Socialist group to support this bill: the institutionalization of the financing of development aid. However, this should not obscure each country’s compliance with its commitments in terms of development financing. We are still far from counting! by

By voting on the bill today, Belgium sets a first stone to a building that, in the long run, can lead to a better control of international financial networks. With this vote, we send a strong signal to the populations of countries that suffer, every day, the sometimes devastating effects of financial speculation. It is also a concrete signal of solidarity with these countries. We are going beyond the usual discourse about increasing the North/South gap. We are making a strong act which, I hope, will soon be followed at European level – we also count on you, Mr. Minister – then at global level. The impunity with which certain financial groups operate must be put to an end. We can no longer tolerate that a decision made in an office in London, New York or Tokyo puts at risk the entire economy of a country or region but also the lives of the citizens of this world.

Our vote today will not change everything from day to day, we know it, but it can have a training effect, and we hope it. I greet here all the associations that have helped us and continue to do so by relaying the information to their contacts across Europe. I would like to make a comparison with the action our country has taken against anti-personnel mines. If this action also seemed to have, 10 years ago, a purely symbolic value, more and more States are signing, at the present time, the convention concluded in the matter. Patience and tenacity are the main words in this type of fighting, and we have them!

Beyond the debate on the Spahn tax, there are other construction sites on which action needs to be taken. I think of course of all the OECD work on tax havens and the fight against money laundering. I also think of the reform and democratization of the international financial institutions.

All of these topics will be or are already the subject of an analysis pronounced in the Commission on Globalization. This commission, set up at the request of the government, is a formidable tool for parliament to deal with these global issues with clarity. We still have a lot of bread on the board and, as soon as we come back, we will start working on other projects for better equality in this world.

Only 4% of the transactions concerned have a direct relationship with the real economy in the form of exchange of goods and services.

In contrast, the 81% rate provided for in the proposal explicitly aims to penalize financial movements that can jeopardize the financial balance of a country and thus destroy very quickly any development capacity. The political choice we are making today is that of better control over the financial movements. It is also a realistic choice because we do not want this choice to be made without our main economic partners. Indeed – it has been said – the entry into force of the proposal that we are called to vote on is conditional on the introduction of the same type of legislation throughout the euro area.

For the Socialist Party, in addition to its corrective role in relation to excessive speculative behavior, the Spahn tax presents another advantage: that of targeting the financial masses that are currently tax-free and which occupy a considerable place in the economy. For the PS, the implementation of a tax on capital movements allows a beginning — and only a beginning, Mr. Minister — of re-balancing the taxation that weighs on labour towards capital, i.e. a greater solidarity between the factors of production.

Hagen Goyvaerts VB ⚙

As previous speakers have already pointed out, it was the American economist and Nobel Prize winner James Tobin who, in the early 1970s, developed a plan to introduce a tax on foreign exchange transactions to reduce the volatility of fairly fluid exchange rates such as the dollar versus the yen and the dollar versus the euro. In itself, this is not an insignificant data in a process of increasing global market integration and liberalization. It is also not insignificant to point out, colleagues, that Tobin was a fervent advocate of a free market economy. He saw the tax as an economic instrument in which any tax revenues were not the main argument for introducing the tax. He also did not see the tax as a political instrument. His intention was to splash some sand in the radar work of the excessively efficient international money markets by imposing a low proportional tax of 0.5 to 1 percent on all foreign exchange transactions. In that sense, the Tobin tax could be a means of tempering the emptiness of the Western world, Europe and America towards the Third World to safeguard our own prosperity and employment. Their

The idea of an international uniform tax on all exchange transactions from one currency to another slumbered for about twenty years. Only at times of international currency speculation such as in Mexico in 1994, in Southeast Asia in 1997, in Russia in 1998 and in Brazil in 1999 came the call to impose a tax again. In recent years, the tax has also become actual due to the rise of the so-called anti-globalistic or other-globalistic movement, which see the tax as a source of money. They see it as a new form of what I would call redistribution of wealth in response to the capitalist world order. Groups such as Attac, Brotherly Divisions, 11.11.11 and other left-to-extreme-left movements wanted to introduce the tax to finance development projects in the Third World.

James Tobin has repeatedly resisted the ideas of, among others, Attac and the politically propagandistic recovery of his idea. Tobin believed that the anti-globalists used his ideas to carry out a certain development policy with the income of the tax, with which he did not agree at all. His intention was to ⁇ a form of stabilization in the markets by counteracting short-term speculation with immense capital. The strange thing is that this has already been achieved in the European Union with the introduction of the euro. As a result, all speculation between the German mark, the French franc and other currencies from the eurozone belongs to the past.

After some disturbing waves of speculation in Asia in the 1990s, a certain Spahn came up with a variant on the Tobin tax for the day. It was a very low rate on all foreign exchange transactions at normal times and a high surcharge in times of intense currency speculation. At first glance, it seems to be a refinement, but I fear that such a mechanism in practice becomes even more difficult to implement. Both Tobin and Spahn were aware that a tax on international capital movements is not so realisable.

Therefore, Mr. Speaker, I would like to use my speaking time to draw attention to a number of technical, economic, legal and political issues.

Colleagues, in terms of technical aspects, in order to prevent market distortions as much as possible, the tax base should be as broad as possible. No economic operator should therefore be excluded. However, we note that in today’s financial markets all sorts of derivatives and futures contracts are increasingly used. A net tax on exchange transactions would therefore only lead to evasion through other financial products. Therefore, the question arises how the taxable basis should be defined and which transactions are taxable in that case.

The collection and redistribution of taxes will also pose problems. Some suggest that this should be done by a supranational institution, such as the World Bank or the International Monetary Fund, but opinions are also divided. Some organizations even regard the IMF and the World Bank as undemocratic institutions. They do not consider that they are eligible to ensure the distribution of revenue. Even if a tax is chosen, it must also be determined how it will be administered – which is another technical aspect – and at what international uniform rate.

In addition to these not insignificant obstacles, the question arises how to distinguish between speculative and non-speculative cash flows, such as investment capital. This can only be done if the intention of the economic operator is known. A tax on exchange transactions implies that all transactions are taxed. This also means that normal trade transactions would fall within the scope of the tax, which of course has an impact on the economic transactions. In our view, that may not be the intention.

Colleagues, in terms of economic aspects, according to the Bank for International Payments, sales on the international foreign exchange markets amounted to an average of US$1,500 billion per day over the past few years. That is about six times the Belgian gross domestic product. A 1% global transaction tax, if taken as a static tax which is not evidence in itself, would yield approximately $15 billion per day or $3,750 billion annually. Some experts and economic specialists are of the opinion that this amount should be sharply nuanced.

Furthermore, we know from the discussions and hearings that there is far from an international consensus on the introduction of this tax. As long as it is not introduced globally, the tax has little meaning in our opinion. Much of the exchange transactions will simply move to those countries where the tax does not exist.

It should also be noted that there is a major misconception about the extent of speculation in the foreign exchange markets. Proponents of the tax almost always assume that the vast majority of transactions are merely speculative movements. Professor De Grauwe, professor of economics at KU Leuven and former VLD senator, an unmistakable source on the subject, points out that this is not quite the case. Approximately 80% of these transactions involve risk coverage, which with a difficult term is described as hedging. It is about buying and selling dealers who want to cover themselves against price fluctuations. Just today, colleagues, I read in De Tijd that from the autumn the Belgian banks can also offer leverage funds – which will be the Dutch name for it – for private investors, where leverage funds in reality use derivative products to be better covered against price drops and, above all, to speculate much more grossly in a rising market. How should these two be joined together?! This seems to me contradictory. To the extent that these transactions are affected by the tax, in my opinion, the coverage will decrease and the volatility could increase. Their

According to Tobin’s original idea, the liberalization and globalization of the financial markets would lead to higher fluctuations in exchange rates. If we look at the history since the early 1980s, the industrial world is experiencing a sharp increase in international capital flows. This undoubtedly led to a very strong expansion of daily turnover on the foreign exchange markets. Despite this increase in foreign exchange transactions, there is no conclusive evidence to date that the volatility rate between the major currencies has increased. On the contrary, research would even show that volatility has decreased slightly over the last decade, which naturally undermines Tobin’s position.

Moreover, a Tobin tax would not have been able to prevent the exchange rate crises that occurred in the 1990s. After all, in the days leading up to the crisis, expectations arise that are much higher in the short term than a tax of 0,5% or even 1%. The countries affected by a crisis have always faced devaluations of twenty, thirty and more percent, often due to the mass corruption in the country concerned, or because of the fact that a small elite held a large portion of the economic cake.

Even the variable tax of Spahn would not have offered a solution. Furthermore, the tax would only come into effect if the devaluation has already occurred and would also be perfectly avoidable.

As regards the legal aspects, I would like to refer to the EC Treaty, which guarantees the free movement of capital within the European Union. Under that Treaty, in particular Article 56, all restrictions on capital movements between Member States and between Member States and third countries are prohibited. In February 2001, a Swedish member of the European Parliament asked a parliamentary question on the compatibility of Article 56 of the EC Treaty, on the one hand, and the Tobin tax, on the other. The Commission’s response was negative, in the sense that it held that the introduction of the original Tobin tax could be incompatible with Article 56, even if it was implemented at Community level. Consequently, there is no consensus on the legal feasibility of a Tobin tax within the European Union, let alone a global agreement or consensus.

The new tax should therefore be accompanied by a reduction or abolition of other sources of income. Moreover, as I have just said, Belgium cannot only introduce that Tobin tax because that tax is related to currency. Because our country and all other countries of the euro area have handed over the control of their currencies to the European Central Bank, a Tobin tax must inevitably be arranged in consultation with European partners. So far, only very few countries – with the exception of France – have explicitly voted in favour of a Tobin tax. In general, the motives, namely a greater policy autonomy, the stabilisation of exchange rates and the counter-speculation, are supported, but there are doubts as to whether the Tobin tax or the Spahn variants are the appropriate means to ⁇ those objectives and whether the measure is feasible and controllable.

Consequently, I dare to doubt whether the introduction of such a tax will satisfy the original objective of stabilizing exchange rates and curbing speculative capital flows. Instead of fighting the symptoms, I think, the problem should be addressed at the source. For example, why not develop a system for temporary controls on capital inputs and outputs, instead of taxing financial transactions? Such a control can be perfectly imposed by the IMF since the IMF has the power to monitor the macroeconomic situation of a country or countries and therefore can intervene perfectly. Once the system exists and the country concerned again meets international monetary, financial and economic standards, the capital constraints can of course be gradually lifted. In the case of a control system, it is therefore clear that it must meet strict conditions and should only be of a temporary nature.

The Flemish Bloc supports measures that correct the functioning of a free market where necessary and this in a controlled and non-harmful way. In addition, we are in favor of a socially and ecologically corrected free market economy as a means of promoting the well-being and prosperity of countries or nations, which, however, does not prevent corrective action against disruptions such as financial speculation and economic destabilization due to unrestricted free trade.

Today we vote on a formerly symbolic, but also cosmetic law. Symbolic, because the law in its current form will most likely never know an implementation. I find this very strange. I thought that we as legislators should start by making laws that are implemented at least in the short term and not in twenty years or never. Cosmetically, because I believe that the moral satisfaction that the Tobintaks promises to its followers or protagonists is based on an illusion. I fear that wearing a badge with a smiley will not help much.

We look forward to the voting behavior of the liberal groups. In the various hearings, they have been very critical about this at certain times. We are very interested in the voting behavior of the VLD in particular, unless they again obey and bend for cohesion in this majority. Their

As may be shown from my speech, my group will not support this bill. We will even vote against.

Josée Lejeune MR ⚙

Mr. Speaker, Mr. Minister, dear colleagues, today we are examining a bill proposing to establish a tax mode that became famous under the name Tobin tax.

Already during the last parliamentary term, hearings had been conducted in the context of the introduction in Belgian law of a Tobin-Span tax. This is a tax on financial transactions. It has a double purpose. First, collect funds that will be used to finance development cooperation. In this regard, a small tax is planned. Then put a brake on speculation operations. These operations are perceived as attacks on currencies, causing the speculator to enrich and resulting in a monetary crisis in the country whose currency is the victim.

Therefore, a high tax should be envisaged. It is a noble, generous, symbolic and passionate idea. It would, according to estimates, allow for significant amounts to be allocated to development cooperation. The use of these amounts would give proven and effective results.

Beyond these goals, which do not call for criticism and to which any Democrat can subscribe, it is necessary to examine the means employed to ⁇ them. The question is about the instrument used.

First of all, when it comes to the release of funds, it might be interesting to recall that money is not a prerequisite for development. Drawing out significant amounts without having long-term management plans and progressive transmission of economic knowledge would be useless. Therefore, the emphasis should be placed on the framework and establishment of structures rather than on pure financing. Some will rightly say that the frameworking and setting up of structures can only be done through the unlocking of financial resources.

Then comes another point, the Tobin tax. The benefits have been mentioned. Now let’s talk about the disadvantages. It seems that this symbol of the struggle against speculators and financial crises is endowed with an aura such that it is impossible, unthinkable and sacrilegious to consider the possibility of a criticism of the Tobin-Span tax. We are not demagogues, we are not demagogues. This idea, like all products of human activity, is imperfect. The imperfection of the concrete implementation of a project sometimes exceeds the legitimacy of its purpose in such a way that it is better to give it up and look in another direction.

Let us first mention the perverse effect of such a tax. This tax would have the effect of putting a brake on the economic activity of a country. Any cross-border activity that takes place in two currencies is presumed to be speculative when it takes place in a so-called turbulent period. Such a presumption is inapplicable in practice or then at the cost of many abuses and adverse consequences.

Take the example of a Belgian SME that concludes a supply contract with a U.S. wholesale supplier. The contract has certain terms on the date on which the payment will have to be made, as it is regular usage. A more or less lengthy period is planned. If at the date of payment, a troublesome period is in progress, the long-term planned transaction will be presumed to be speculative and be hit with a prohibitive tax. The adverse consequences are predictable: impossible for one to fulfill his contract, significant losses and financial difficulties.

Many arguments will contradict this hypothesis, for example the introduction of a minimum amount to the transaction. This argument is easily demonstrated by the reality of international finance that means that international financial operations go through banks that obviously have the structures, funds, contacts, links necessary to carry out these operations in a fast and secure manner. However, the banks do not handle the files separately and individually. They act by cumulating amounts, allowing them to process multiple transactions at once. It is more than likely that in this case the volume will surely exceed the minimum rate required to speak of speculative transaction.

It is also worth mentioning the beneficial effect that certain operations may have on international stability. Certain speculations can bring the attention of international leaders to the structural problems of certain economies and encourage them to address them. Furthermore, these speculations may allow to detect the will of some central banks to carry out a devaluation of their currency to subsequently make it rise abruptly by one or the other economic and stock market operation. Financial speculation that would drive to buy a cheap currency when it is known that it will go up will therefore have a stabilizing effect as it will gradually raise the price of the currency.

We should not lose sight of the beneficial effects of the quick and inexpensive transfer of funds from one bank to another. History can provide examples of bankruptcies whose consequences have had international repercussions, primarily affecting depositors and creditors. The risk of contagion in international finance is very significant. However, imposing a tax and brakes on international transactions would eliminate the best weapon that mothers have to counter such a contagion. Of course we are talking about financing. Banks can be saved quickly and without consequences for depositors and small savers, through quick fund transfers, purchase of shares and capital increases by the parent home. Such manoeuvres would be impossible if a tax on financial transactions would bring a brake to them. by

In addition, let’s not be fooled, the introduction of a Tobin type tax would quickly lead to the establishment of a parallel, uncontrolled market on which transactions will take place.

This market would be all the more obscure as its purpose and purpose would be to circumvent the establishment of this tax. This parallel market would have other negative repercussions. There is indeed a series of agreements between central banks aimed at promoting financial stability and monetary solidity and security. These agreements are better known as the Basel Agreements. These agreements, remember, adopted between industry professionals, cover the equity quota, the supervision of subsidiaries and branches, operations, foreign exchange positions and so many others, that it would be tired and unnecessary to carry out an exhaustive inventory.

These agreements, however, are not perfect, we know, and are sometimes bypassed, unfortunately. Financial scandals such as those of the Bank of Credit and International Trade have shown the fragility of the security of financial markets as well as the creativity of people who want to bypass regulations. The introduction of a brake to the circulation of currencies and transactions would give speculators an additional opportunity to exploit the weaknesses of a system and would reveal a willingness to bypass that brake at the expense of the transparency and security of the entire system.

We could issue a succession of arguments against the introduction of a financial transaction tax. We will not conduct an exhaustive and exhaustive examination of each case, but we will conclude with a general comment that takes up the most important argument against the introduction of such a tax.

The introduction of a Tobin type tax in Belgium would have the sole result of seeing international financial transactions take place abroad. All international banks would leave our territory as well as all corporate audit bodies that have international activity. Such an initiative within the eurozone would result in speculators preferring London’s financial places. A implementation at the European Union level would see a relocation of financial transactions to U.S., Swiss or other cities. Hence this final note: the purpose of this tax is praised. Strengthening the financial means of development cooperation is part of the will of all Democrats concerned with the situation of human beings in the world. The fact of curbing destructive and selfish financial speculation participates in the same desire to prevent a person alone, for his sole interest, from causing financial catastrophes with tragic consequences.

Everyone agrees on this point. The introduction of a Tobin type tax would be a non-negligible tool. We are all on the same wavelength. The problem is not in the beneficial effect of this tax but rather in its use. We have talked about the perverse effects of this tax, but we do not ignore that a careful, intelligent reflection will respond to it and remedy it. Let us be clear: this tax can only have a global character. Its creation, its implementation only at the Belgian level, or even at the European level, would have absolutely no meaning and would cause more damage than profits. by

I would like to return to this recommendation adopted by the Working Group on Globalization.

Among the amendments proposed by a political group that I will not cite, we could find a consideration that, I quote, “financial stability should be considered as a global public good.” We fully agree with this position. That is why we voted for this amendment. But then a question raises me: how can one ensure the implementation of a global public good by acting only at the European level? If this action was coordinated at the European level, it could have little influence. But this is not even the case. The law provides for its entry into force at the time, I cite, “the Member States of the Economic and Monetary Union shall have provided for such a law in their legislation or that a European directive or regulation has been adopted.” It is not even required that the tax be the same, that the measures of enforcement be the same, that the basis be the same from one State to another. Nor is it planned that this taxation will come into effect effectively at the same time.

The implementation of a Tobin type tax in the euro area alone would have as the sole consequence, I recall, a relocation of transaction centers to other countries and to other financial places. A relocalization of international financial operations would cause this consequence of seeing the square deserted and losing an important instrument: control.

This is why we must strongly oppose the idea of introducing a Tobin-Spahn tax on a lower scale than that of the OECD. Given that this tax is intended to curb destructive international speculative transactions and to finance development cooperation through a tax on international financial transactions, such a tax can only be conceived at the international level. Considering it only at the European level would only isolate Europe. This tax can only be effective by being global; I repeat it.

Assuming that a global tax may be possible, structures must be planned and put in place effectively to overcome technical obstacles. Some will say that technical obstacles should not constitute a wall against the will and political symbols attached to the introduction of such a tax.

Beyond the sincerity of the authors of the project, Mr. Van der Maelen, undisputed and quite praiseworthy, we must recall that this is an economic instrument. Tax instruments are not manipulated, and even less when they have an international character.

The consequences would be too serious and very tragic. Technology is part of law enforcement. To stick to the only symbol is futile and useless. If a law is to be drafted, it is to be enforced. The technique must therefore be taken into account. Who will determine the basis of the tax, its amount, the institution competent to ensure its recovery, the judicial authorities who will have the power to verify its correct and complete application, the institutions responsible for collecting the fruits of the tax, for archiving it, for setting up records in which the activities of each tax debtor will be listed? There are so many questions, but my list is not exhaustive, which the submitted proposals do not answer. These answers are, however, necessary. by

In conclusion, we will return to the two main objections to the current introduction of a Tobin-Spahn tax. The first, and most important, concerns the global character of the tax. The latter only makes sense if it has a largely international character. The Eurozone is not enough. Other countries involved in international financial transactions must adopt such an instrument and implement it effectively. The second objection concerns this effective application. International structures with coercive power must be planned, created, which is not yet the case at the present time.

For all these reasons, ladies, gentlemen, dear colleagues, we believe that the Tobin tax should not be the subject of a law in Belgium and that only a consensus at the OECD level could allow its adoption. Why wasn’t a draft resolution drafted and asked the government to bring this project internationally? I repeat, we are in favor of the positive symbol that this can bring to the populations victims of wild speculation and to the peoples who benefit from development cooperation. We are in favor of the idea that the first should be curtailed and the second increased, but we are not in favor of the instrument as it is presented. This is, I regret to say, an incomplete, inapplicable, bad text and which does not deserve to be voted.

For all these reasons, the group will abstain.

Hagen Goyvaerts VB ⚙

As previous speakers have already pointed out, it was American economist and Nobel Prize winner James Tobin who, in the early 1970s, developed a plan to introduce a tax on foreign exchange transactions to reduce the volatility of fairly fluid exchange rates such as the dollar versus the yen and the dollar versus the euro. In itself, this is not an insignificant data in a process of increasing global market integration and liberalization. It is also not insignificant to point out, colleagues, that Tobin was a fervent advocate of a free market economy. He saw the tax as an economic instrument in which any tax revenue was not the main argument for introducing the tax. He also did not see the tax as a political instrument. His intention was to splash some sand in the radar work of the excessively efficient international money markets by imposing a low proportional tax of 0.5 to 1 percent on all foreign exchange transactions. In that sense, the Tobin Tax could be a means of tempering the empty flow of the Western world, Europe and America towards the Third World to safeguard our own prosperity and employment.

Therefore, Mr. Speaker, I would like to use my speaking time to draw attention to a number of technical, economic, legal and political issues.

The collection and redistribution of taxes will also pose problems. Some suggest that this should be done by a supranational institution, such as the World Bank or the International Monetary Fund, but opinions are also divided. Some organizations even regard the IMF and the World Bank as undemocratic institutions. They do not consider that they are eligible to ensure the distribution of revenue. Even if a tax is chosen, it still needs to be determined how it will be administered — which is another technical aspect — and at what international uniform rate.

It should also be noted that there is a major misconception about the extent of speculation in the foreign exchange markets. Proponents of the tax almost always assume that the vast majority of transactions are merely speculative movements. Professor De Grauwe, professor of economics at KU Leuven and former VLD senator, an unmistakable source in the matter, points out that this is not exactly the case. Approximately 80% of these transactions involve risk coverage, which with a difficult term is described as hedging. It is about buying and selling dealers who want to cover themselves against price fluctuations. Just today, colleagues, I read in De Tijd that from autumn the Belgian banks can also offer leverage funds — which will be the Dutch name for it — to private investors, where leverage funds in reality use derivative products to be better covered against price drops and, above all, to speculate much more roughly in a rising market. How should these two be joined together?! This seems to me contradictory. To the extent that these transactions are affected by the tax, in my opinion, the coverage will decrease and the volatility could increase.

Even the variable tax of Spahn would not have offered a solution. Furthermore, the tax would only come into effect if the devaluation has already occurred and would also be perfectly avoidable.

Finally, there are a number of political aspects. Of course, the arguments mentioned above are closely linked to the political aspect. After all, a global introduction of a tax means that the taxation power and the redistribution power of the national states are limited. For Belgium, the introduction of a Tobin tax would in principle, of course, be possible, provided that the global tax pressure does not increase, one of those Belgian illusions that we must still face after five years of policy by liberals and socialists, in the sense that the global tax pressure is still not spectacularly or significantly reduced. The new tax should therefore be accompanied by a reduction or elimination of other sources of income. Moreover, as I have just said, Belgium cannot only introduce that Tobin tax because that tax is related to currency. Because our country and all other countries of the euro area have handed over the control of their currencies to the European Central Bank, a Tobin tax must inevitably be arranged in consultation with European partners. So far, only very few countries — with the exception of France — have explicitly voted in favour of a Tobin Tax. In general, the motives, namely a greater policy autonomy, the stabilisation of exchange rates and the counter-speculation, are supported, but there are doubts as to whether the Tobin tax or the Spahn variants are the appropriate means to ⁇ those objectives and whether the measure is feasible and controllable.

As may be shown from my speech, my group will not support this bill. We will even vote against.

Josée Lejeune MR ⚙

Mr. Speaker, Mr. Minister, dear colleagues, today we are examining a bill proposing to establish a tax mode that became famous under the name Tobin tax.

Already during the last parliamentary term, hearings had been conducted as part of the introduction in Belgian law of a TobinSpahn type tax. This is a tax on financial transactions. It has a double purpose. First, collect funds that will be used to finance development cooperation. In this regard, a small tax is planned. Then put a brake on speculation operations. These operations are perceived as attacks on currencies, causing the speculator to enrich and resulting in a monetary crisis in the country whose currency is the victim.

Beyond these goals, which do not call for criticism and to which any Democrat can subscribe, it is necessary to examine the means employed to ⁇ them. The question is about the instrument used.

Then comes another point, the Tobin tax. The benefits have been mentioned. Now let’s talk about the disadvantages. It seems that this symbol of the fight against speculators and financial crises is endowed with an aura such that it is impossible, unthinkable and sacrilegious to consider the possibility of a criticism of the TobinSpahn tax. We are not demagogues, we are not demagogues. This idea, like all products of human activity, is imperfect. The imperfection of the concrete implementation of a project sometimes exceeds the legitimacy of its purpose in such a way that it is better to give it up and look in another direction.

We should not lose sight of the beneficial effects of the quick and inexpensive transfer of funds from one bank to another. History can provide examples of bankruptcies whose consequences have had international repercussions, primarily affecting depositors and creditors. The risk of contagion in international finance is very significant. However, imposing a tax and brakes on international transactions would remove the best weapon that mothers have to counter such a contagion. Of course we are talking about financing. Banks can be saved quickly and without consequences for depositors and small savers, through quick funds transfers, shares purchases and capital increases by the parent home. Such manoeuvres would be impossible if a tax on financial transactions would put a brake on them.

In addition, let’s not be fooled, the introduction of a Tobin type tax would quickly lead to the establishment of a parallel, uncontrolled market on which transactions will take place.

Everyone agrees on this point. The introduction of a Tobin type tax would be a non-negligible tool. We are all on the same wavelength. The problem is not in the beneficial effect of this tax but rather in its use. We have talked about the perverse effects of this tax, but we do not ignore that careful, intelligent reflection will help to respond and remedy it. Let’s be clear: this tax can only have a global character. Its creation, its implementation only at the Belgian level, or even at the European level, would have absolutely no sense and would cause more damage than profits. I would like to return to this recommendation adopted by the Working Group on Globalization.

For all these reasons, the group will abstain.

Willy Cortois Open Vld ⚙

Mr. Speaker, colleagues, we have had a long discussion on the Tobin tax in the Committee on Globalization, where advocates and opponents have often developed their arguments from a fairly general macroeconomic view. The Committee on Globalization decided by a majority that it would recommend the Committee on Finance to approve the present bill. In my opinion, this has been done fairly quickly, and I have to argue, Mr. Speaker, colleagues, that I do not immediately see clearly how this will be adapted to, at least, the European context, which should be the intention. Finally, it was chosen to refer to the time when this law would come into force. However, I still feel that our work is not finished and that we still do not know very well in which system we will actually operate.

I had actually also conceived a bit of a general continuous approach, but now that I have heard the various statements, I would still like to adjust myself more to the pragmatic plane in which I would like to test the consequences of the present bill on the economic reality. I think that we, as politicians in this hemisphere, must make the effort to see that what we propose, whether from an ideological approach, whether from a general social approach, responds to what is taking place in the economic reality. If we want to ⁇ the goals we all agree on, we need to see if this is the right way.

I may be going to conduct the debate a little sharper on the cut, ⁇ for some from a liberal view. My first concern, however, was to see how this is now in essence and what the consequences are in practice.

The first consideration I must make, Mr. Speaker, Colleagues, is that the supporters of the Tobin tax state that it is a minimum tax of 0.01% or 0.02% aimed at affecting the speculative movements on the international monetary markets.

At the same time, however, I note that it is a tax that will affect all international money movements. This is based on an assertion that, in my opinion, is not correct if it is tested on reality. The majority of international monetary transactions are speculative. In practice, however, this is not the case. The finding that in the whole of these movements there is no clear distinction between speculative and useful transactions is, in my opinion, a weak point in the bill.

I come to a second consideration. One study found that 80 to 85% of all international transactions occur and involve investments or exposure to so-called exchange rate risks, so-called hedging operations arising from economic and trade activities aimed at avoiding the negative effects of speculation on possible exchange rate differences between currencies. In practice, this means that the buyer and the seller, if they belong to countries with a different currency zone, only want to ensure that the price on which they conclude a contract at the time of delivery and payment is still the same. With this technique, they enable the exchange of goods, services and investments between partners from different currency zones. Considering these operations as part of international monetary speculation is, in my opinion, not a good perspective.

Third consideration . A Tobin tax with its derivatives – there are variants – can work non-disturbingly provided that such practice exists in all countries. If this is not the case – which is now the reality – international transactions will mainly take place in countries and currencies where the Tobin tax does not apply.

I will put it more concrete. If tomorrow the Tobin tax is introduced in all countries of the European Union, then in the future the world will pay more and more in dollars and the euro as international currency becomes more and more a marginal element.

Fourth, this concern has to do with my fear that the Tobin tax will not promote investments. There is also a huge misunderstanding that has not been sufficiently clarified during the various committee work. Colleagues, an investment is more than what the advocates imagine. Therefore, it is not a one-off transaction in which one puts in one blow ten million or twenty million dollars or euros in a particular project in a particular country, including in a developing country. The reasoning in the proposals of the supporters is a bit too simplistic. Their

The investor who draws his funds from one of the major pension funds in the euro area hopes that his investment project will go well. At some point, he wants to pay his dividends in his own country and therefore in euros. In this transfer, he will have to pay the Tobin tax again. If he later wants to invest the proceeds in a non-eurozone country, he must again raise the – though low – Tobin tax of 0.01% or 0.02%.

The low Tobin tax, by its cumulative force, by its repetitive force, constitutes a non-insignificant cost element. It may ultimately result in the investor deciding that all together he is better invested in his own euro zone. The end result would be that the money remains where it is now, this is today in the rich North and not in the poor South. If the Tobin tax ever applies globally, it will be a tax that will cost weeks more for developing countries to drive trade and try to unlock investments. That may not be the intention.

Fifth, the Spahn variant, where a high tax on transactions is levied if the exchange rate exceeds a pre-determined bandwidth, is like fig after Easter. If the Spahn variant comes into effect, devaluation is a fact. The speculations that occur are not the cause, but the consequence of a national policy. The discussion took as an example the great monetary and economic crises of 1996, 1997 and 1998 in a number of Asian countries such as South Korea, Malaysia, Thailand and Indonesia.

All countries affected by the crisis at the time had huge short-term debts. It was precisely for those debts that this short-term capital with government guarantees was attracted to guarantee, with all means and with the monetary reserves, the fixed exchange rate of their currency, especially against the dollar. These relatively cheap short-term loans from abroad were then used to realize long-term investments at relatively low interest rates in the home country. These long-term investments occurred mainly in state-owned companies or in large and powerful domestic groups run by friends or family members. Furthermore, these groups were still supported mostly by dumped state subsidies or by building monopolies on domestic markets.

The mastodontes were not internationally competitive, which resulted in the products in these countries being sold abroad again only through export subsidies. It was a fundamentally unhealthy situation that in fact relied on a financial soap bubble and not on efficiently investing and managing. Furthermore, the proceeds of these large groups came into the hands of a wealthy, friendly upper layer which converted them in part into foreign currencies which were not used to support the domestic economy. Therefore, it is not surprising that confidence in the currency at some point was compromised and dropped altogether. Exactly at that moment, speculators saw this possibility as a chance to strike their battles. I repeat that they are, therefore, not the cause, but the result of a failing domestic policy where the opposition is usually also politically murdered in order not to be able to accuse the unrest. Their

Only a cumulative all-inclusive Tobin tax can generate billions. However, there is no one who offers a solution – I have at least not heard of it yet – and says how through the channel of public development it can be ensured that these capitals are efficiently invested in the countries themselves and contribute to an improvement of the economic condition and the general well-being of the local population.

Unfortunately, these capitals are often used on various routes for the consolidation of their own market, as well as for the development of a police apparatus and a military apparatus.

In the meantime, I would like to ask a silly question. Wouldn’t it be better and easier for the redistribution of world wealth to advocate for the removal of destructive subsidiary agricultural policies in the rich countries and for the further liberalization of our markets whose access is hindered by customs tariffs or by all sorts of administrative barriers for products from developing countries? This, of course, requires a little more political courage. It is easy to always refer to the dictatorship of the free market, although studies have shown that it is precisely the free market of goods, services and capital that can lead to political freedom in developing countries and to respect for human rights. This is also not unimportant from a European point of view. I refer to the example of China where the activists who are eager for more democracy, for more decentralization, have also eagerly eagerly for China’s accession to international trade organizations, where the rules of the game lead to more decentralization and result in more calm consumers and world citizens. For liberals, this is a fundamental reason why we are in favor of free trade, free movement of services, goods and capital.

We believe that the Tobin tax is not the best method to realize the free trade of goods, services and capital, nor does it fundamentally contribute to the creation of a better and fairer world and a better distribution of world wealth.

For all these reasons, the VLD group will not approve the present proposal.

Gérard Gobert Ecolo ⚙

Mr. Speaker, it was in December 1999 that Jacky Morael submitted to the Senate a proposal for a resolution concerning the establishment of a minimum tax on speculative financial transactions. At that time, in the wake of the WTO Summit in Seattle, everyone gradually became aware, both in civil society and in the political world, of the challenges of liberalizing trade and opening borders.

The idea put forward by James Tobin to introduce a grain of sand into the mechanisms of globalization of financial markets, in order to avoid disruptions that in a few hours can destabilize the economy of a country, would for the first time be the subject of a scientific analysis and arouse a very broad political debate. Since 1999, numerous hearings have been held, both in the House and in the Senate. Studies were conducted which concluded in particular on the technical feasibility of the device. Debates, often very animated, result today in the plenary vote on a bill introducing a tax on exchange operations of currencies, banknotes and currencies.

Originally, the Tobin tax consisted of a single rate applicable to all foreign exchange transactions. The main problem with the unit tax lies in the fact that it is practically impossible to determine the appropriate amount. Too high tax leads to capital leakage; too low tax does not produce the expected deterrent effect. Furthermore, the Tobin system does not guarantee a stable revenue flow since if the effect is completely deterrent, there are no recipes at all. This is what the Minister of Finance called the biodegradability of this version.

That’s why the concept was refined by Professor Spahn to turn into a viable mechanism that proposes a double rate system: a low rate so that capital movements are not disturbed while generating revenue and another very high rate applied when speculation on a currency is located outside the pivot rate.

If parliamentary work today results in a plenary vote, it is of course because the legislative process has followed its course and a majority has emerged in the Finance Committee. But it is also – ⁇ mostly – thanks to the unwavering mobilization of many citizens within many organizations that, for years, have carried out a work of conviction, pedagogy and explanation of issues. These many associations have supported us in the idea that it is time to go beyond the stage of generous ideas and that concrete political acts must be made.

In my view, there are two types of political decisions: on the one hand, immediate management decisions with direct consequences and, on the other hand, decisions that constitute political signals indicating to citizens and market operators in what direction the future is aimed at.

The Tobin-Spahn law that we are discussing today is of this second type. This is a strong signal that marks a democratic advance in the world of financial transactions. It is a strong signal that proposes a logic of solidarity between human and economic exchanges. It is a strong signal that offers a partial but realistic response to the North/South imbalance, to the drifts of debrided globalization and to destabilizing speculation.

I would also like to thank all members of the scientific community, university professors, experts, who helped us validate the feasibility of the project and its technical implementation. by

Together with France, Belgium will now be at the forefront of the European struggle for the implementation of a tax on foreign exchange transactions. I agree with the considerations of Ms. Lejeune and Mr. Cortois when they request that this tax be applied in an area that is as wide as possible. But in the absence of a world government, it seems to me that pragmatism requires it right to start somewhere. And I wish, like the liberal groups, that the government seize this proposal without delay and defend it at the European level or at the OECD level.

It is true that the struggle must continue, and it is only just beginning at the European level. The new European Parliament, which has just been elected and will be set up on 20 July, will have the task of continuing the work of conviction with other Member States. At the level of the Intergroup on International Taxation, a resolution will be quickly drafted so that other countries are invited to follow the example of Belgium and France.

So today we are experiencing an important milestone, but many debates are still in the horizon, to bring more solidarity in international exchanges and more social justice at the global level.

Willy Cortois Open Vld ⚙

The first consideration I must make, Mr. Speaker, colleagues, is that the supporters of the Tobin tax argue that it is a — although minimal — tax of 0,01% or 0,02% aimed at affecting the speculative movements on the international monetary markets.

Third consideration . A Tobin tax with its derivatives — there are variants — can work non-disturbingly provided that such practice exists in all countries. If this is not the case—which is now the reality—international transactions will mainly take place in countries and currencies where the Tobin tax does not apply.

The investor who draws his funds from one of the major pension funds in the euro area hopes that his investment project will go well. At some point, he wants to pay his dividends in his own country and therefore in euros. In this transfer, he will have to pay the Tobin tax again. If he subsequently wants to invest the proceeds in a non-eurozone country, he must again raise the – though low – Tobin tax of 0.01% or 0.02%.

Only a cumulative all-inclusive Tobin tax can generate billions. However, there is no one who offers a solution — I have at least not heard of it yet — and says how through the channel of public development it can be ensured that these capitals are invested efficiently in the countries themselves and contribute to an improvement of the economic condition and the general well-being of the local population.

Unfortunately, these capitals are often used on various routes for the consolidation of their own market, as well as for the development of a police apparatus and a military apparatus.

For all these reasons, the VLD group will not approve the present proposal.

Dirk Van der Maelen Vooruit ⚙

Mr. Speaker, Mr. Minister, colleagues, considering the advanced hour, I will be very brief. I would like to emphasize three points.

First, I would like to begin by thanking all my colleagues, both supporters and opponents, for the long road we have taken. We have been debating this issue in the Chamber for five years now. I think I can say that both on the side of the opponents and on the side of the supporters was an attempt to conduct a debate at the level. We have organized numerous hearings, both for and against, with respected speakers speaking with good arguments advocating for and against a Tobin tax in its Spahn variant.

For me – and I think also for the other supporters – it is clear that this is a political choice. We have rejected the arguments that it will not work, that it cannot and that – what I heard today again – is contrary to European treaties. I can give those who still have doubts, if they wish, studies of professors who make it clear to us that the bill is fully in line with the European Treaty, which sees a mandate for the European Union to engage in north-south cooperation, to ⁇ monetary stability, and so on.

Opponents also argued that it would not work technically. We heard a Canadian expert here in the Chamber, who made it clear that with the existing system, a minimal intervention – already now, if one wants it, one can know by which routes all capital movements will take place – is sufficient to ensure that the tax is levied.

My conclusion is that it is a political choice. Will the Tobin tax be introduced or not?

I have respect for other opinions in this, but as a social-democrat it is clear to me that it is not possible that the total freedom – I repeat, the total freedom – in the movement of capital may continue to exist. I also believe that the profits made by the actors in that total free movement of capital should also be taxed and that the proceeds from that tax may be used to bring about a more human-worthy world.

Gérard Gobert Ecolo ⚙

If parliamentary work today results in a plenary vote, it is of course because the legislative process has followed its course and a majority has emerged in the Finance Committee. But it is also – ⁇ most importantly – thanks to the unwavering mobilization of many citizens within many organizations that, for years, have carried out a work of conviction, pedagogy and explanation of issues. These many associations have supported us in the idea that it is time to go beyond the stage of generous ideas and that concrete political acts must be made.

I would also like to thank all members of the scientific community, university professors, experts, who helped us validate the feasibility of the project and its technical implementation. Together with France, Belgium will now be at the forefront of the European struggle for the implementation of a tax on foreign exchange transactions. I agree with the considerations of Ms. Lejeune and Mr. Cortois when they request that this tax be applied in an area that is as wide as possible. But in the absence of a global government, it seems to me that pragmatism requires a good start somewhere. And I wish, like the liberal groups, that the government seize this proposal without delay and defend it at the European level or at the OECD level.

So today we are experiencing an important milestone, but many debates are still in the horizon, to bring more solidarity in international exchanges and more social justice at the global level.

Willy Cortois Open Vld ⚙

I do not want to discuss with my good friend and colleague. Mr. Van der Maelen, I just want to say that the difference in your reasoning that you do not make is that you are actually engaged in charging movements and not the result of those movements. If someone, a company, makes profits as a result of monetary transactions – I don’t know if you are aware of it – then they are taxed on that today. If, as a result of exchange rate fluctuations, one makes more profit than one had anticipated, then that surplus yield is taxed. What you are doing now – I’m not convinced of it, but I know that the debate is not over – is to make a fundamental mistake, if I can use that word wrong, in approximation. Now you’re actually working on normal movements while you’re actually having to work on the result.

Dirk Van der Maelen Vooruit ⚙

I understand your point and I have two objections. We are now repeating the debate. The first opposition. The figures have already been quoted here. Between $1,500 billion and $2,000 per day are shifted on the capital market. That is the first number. The second figure comes from the Bank for International Payments: 4,300 billion a year is related to the real economy. That is, they are exchange transactions resulting from the sale of goods or from investments.

Listen carefully: 2,000 billion capital movements and shifts per day and a real economy of 4,300 billion on an annual basis. Simply put, more than 95% of daily capital movements have nothing to do with the real economy. These activities generate huge profits.

I come to my second argument. We all know the greatest striker in this matter: George Soros. He has his billion-dollar wealth based on speculation against the British pound. George Soros is a supporter of a tax on speculative capital movements. He knows that this is a very profitable activity. Since then, CD&V colleagues have said that the tax pressure should not be increased. I believe that in order to finance a more human-worthy world, we should not limit ourselves to the system we have used since 1970, namely asking the different countries to spend a percentage of their GDP on development aid. Who brings it up? All of us. We all know very well how disproportionate the ratio between capital tax and labor tax in our national tax revenues is. If I listen to you, should we ask those who have an income from labour to finance the international challenges we face? I say that the capital must also contribute to this.

It is highly needed. In 2004, 54 countries worldwide were in a worse situation than in the early 1990s. If we continue as we are doing now and we only want to ⁇ that in sub-Saharan Africa, where among other things our former colonies lie, every child enjoys basic education, while we do not change the funding, then we ⁇ that goal – that is the figures of the World Bank; they do not come from Van der Maelen – in 2129. Have you heard this correctly?

If we continue as we are doing, in 2129 every child in the region south of the Sahara will receive education. Child mortality will be reduced south of the Sahara by two-thirds in 2169. On the eradication of hunger one cannot even now attach a number.

Mr. Speaker, Mr. Minister, colleagues, considering the advanced hour, I will be very brief. I would like to emphasize three points.

For me — and I mean also for the other supporters — it is clear that this is a political choice. We rejected the arguments that it will not work, that it cannot and that it — which I heard today again — is contrary to European treaties. I can give those who still have doubts, if they wish, studies of professors who make it clear to us that the bill is fully in line with the European Treaty, which sees a mandate for the European Union to engage in north-south cooperation, to ⁇ monetary stability, and so on.

Opponents also argued that it would not work technically. We heard a Canadian expert here in the Chamber, who made it clear that with the existing system a minimal intervention — already now, if one wants it, one can know by which routes all capital movements will take place — is sufficient to ensure that the tax is levied.

My conclusion is that it is a political choice. Will the Tonbint Tax be introduced or not?

I have respect for other opinions in this, but as a social democrat, it is clear to me that it is not possible that the total freedom — I repeat, the total freedom — in the movement of capital continues. I also believe that the profits made by the actors in that total free movement of capital should also be taxed and that the proceeds from that tax may be used to bring about a more human-worthy world.

Geert Versnick Open Vld ⚙

Mr. Van der Maelen, can I interrupt you for a moment? It is very difficult to follow your yet very interesting presentation because the acoustics here is horrible. I also have the attention of the President.

You know that I am absolutely in favour of increasing our efforts in international cooperation. Together we praised and preached. In the meantime, we are realizing to spend a certain part of our GDP – 0.7 percent – on international cooperation.

The image you hang here is, of course, a very one-sided image. Indeed, we need an effort from the rich North to show solidarity with the South, but everything begins with sound and good governance. You can cut out as much water in the desert as you want, if there is no soil present to stop that water at any given moment and ensure that a plant can grow, you will continue to cast out water. Whether you introduce a Tobin tax or go to 1.5 or 3 percent of GDP, nothing will fix that. I would like to report this to nuance your story. You say it’s a matter of money, but it’s not just a matter of money.

Dirk Van der Maelen Vooruit ⚙

Colleague Versnick, I have never said that. Many conditions, including good governance, must be fulfilled in order that the aid given will have the desired effect. I am saying now that we do not have the necessary money.

All the figures make it clear that if you want to do so through 0.7% of the GDP of different countries, you won’t get there. Did you know that for now, in 2003, we in the OECD countries make an average of 0.24% of GDP? You may still believe it, but I do not believe that we will bring this percentage across all OECD countries together to 0.7% in the very short term. I do not believe that. Our country is doing a good effort and we are happy for that. We are currently at 0.42%, which is good. Exceptionally and once, we are now at 0.6% because we have done the debt relief to Congo. We can only go to 0.7% but that doesn’t help. Therefore, another source is needed.

In addition to the 0.7% that we must continue to maintain and to which mainly the factor labour contributes, we must seek the new source of international financing on the side of capital. If we can ⁇ a tax of 0.01% or 0.02% globally, we expect an amount of approximately 50 billion euros. The Millennium Goals cannot be achieved. There are other plans to try to find more money, but I predict that this will not succeed either. In order to ⁇ the Millennium Goals, in particular in the period 2015-2025, providing food, drink, education, health for all people in the world, we need at least 40 billion euros annually. If we can realize the Tobint Tax globally, we have the resources to do so. Then you are right, and in this I follow you; it is not enough to put the money on the table, it must also be used properly and work must be done on it.

That is why it is good that a small country like Belgium is the first to prove, not only in society, but also in Parliament, that a majority of parliamentarians are of the opinion that we should take that path.

However, if we approve that later, this is, as already said, not a end point; it is a starting point. We already voted on a resolution in this Parliament in 2001, which I would like to answer for a moment why we do not adopt a resolution. In particular, we have asked the Belgian Government and the Minister of Finance to bring the debate on the Tobin tax to the European level. The Minister tried, but failed. Those who are in favour of the idea have said that they do not want to leave it there. If it cannot be done through the way of governments, they will try it through parliaments.

We have written a text that is a translation of the Spahn variant of the Tobin tax made by academics from various universities in Belgium based on the structure of the Sixth VAT Directive. This Directive is applied and used by more than 80 countries worldwide. So we used a technique that is easily exported. Their

On 8 July, a first meeting will take place in the European Parliament with a series of colleagues from the 25 Member States. The proposal has already been translated into most languages of the European Union and is supported by a broad civil society. It is intended that we can tempt 1, 2, 3, and ⁇ 5 or 6 other countries in the European Union to take a similar initiative to prove to their governments that there is a political majority in their societies and parliaments to take this step. The financing of a more human-worthy world cannot be left alone to the 0.7-country, which is an unattainable goal for various countries. It usually involves money generated by the factor labour, as taxes on capital lower everywhere in the developed world. Because this factor is so mobile, you need to go to something international.

We believe that a Tobin tax, a tax on capital movements, is the best source of financing for these enhanced efforts in the field of international solidarity.

I hope we will soon give a majority in the House to the initiative.

Then the work begins for its supporters. With the bill, we will distract Europe and, if necessary, the rest of the world and try to convince them of the usefulness of this track.

We are not alone. James Wolfensohn, the President of the World Bank, has himself repeatedly confirmed that he is also of the opinion that the efforts cannot be financed in the way we are doing and that we should move to a source of interfinancing type Spahn tax. Soon, I hope, as the first parliament in the European Union, we will prove that there is a political majority here to explore that track.

Willy Cortois Open Vld ⚙

I do not want to discuss with my good friend and colleague. Mr. Van der Maelen, I just want to say that the difference in your reasoning that you do not make is that you are actually engaged in charging movements and not the result of those movements. If someone, a company, makes profits from monetary transactions — I don’t know if you are aware of that — then it is taxed today. If, as a result of exchange rate fluctuations, one makes more profit than one had anticipated, then that surplus yield is taxed. What you are doing now—I am not convinced of it, but I know that the debate is not over—is to make a fundamental mistake, if I can use that word wrong, in approximation. Now you’re actually working on normal movements while you’re actually having to work on the result.

President Herman De Croo ⚙

It was an interesting debate. The Minister has the word.

Minister Didier Reynders ⚙

Mr. Speaker, dear colleagues, I will not enter into the debate on the text which is not a pretext but a symbol in the eyes of a number of members of the assembly. I will only remind you of a few elements.

The first – a lot has been talked about development aid – is the commitment made by Belgium to reach 0.7% of its gross domestic product in terms of development aid by 2010. I will have the opportunity – I have also recalled this with several European colleagues – to put this point on the table of the Ministers of Finance of the European Union, but also of the planet as we will meet again on the occasion of the sessions of the World Bank. In fact, it is the first of the solutions to ⁇ – many have recalled – the Millennium Goals. Otherwise, we would remain in a somewhat marginal debate. Belgium is progressing. In 2003, we exceptionally exceeded 0.6% of gross domestic product through debt relief for the Democratic Republic of the Congo. We are therefore on the right track to reach 0.7%; which is very rare not only around the world, but also in Europe. by

If all OECD countries were to fulfill this commitment to reach 0.7% of GDP, we would probably have the means largely sufficient to ⁇ the goals set by many countries at international conferences.

I come to the second point that I would like to remind. There is no reason to oppose a logic of international taxation. There are several paths in this matter, whether it is the one targeting financial movements or the one targeting weapons. Several proposals have been made in this regard. A priori, there is no reason to oppose this type of approach to seeking funding. The problem is whether it is effective and interesting in the context of collecting additional financial resources.

It is in this spirit that, so far, the government’s position was to try to deepen the debate, not only in Belgium, but also on the international stage.

This has been the case for some proposals. First, this was the case at the Belgian level. I requested a report to the High Council for Finance. We have had a report for a while now. Secondly, this was also the case at the European level. I asked for it in the Ecofin Council, during the Belgian Presidency, and we also have a report from the European Commission. This was also the case at the G7. We were a member of the G7 for a year. I have also asked for an international discussion on this subject. This is happening now. For example, with the World Bank, we have many discussions related to international taxation, not only on speculation – I repeat it – but also in other fields.

Is it necessary to make a law in Belgium? I mean no, but according to the government and therefore also for me, there is no problem to go to a vote anyway. In fact, it is the same whether we hold such a vote on a bill or on a resolution. That is the same.

Dirk Van der Maelen Vooruit ⚙

I come to my second argument. We all know the greatest striker in this matter: George Soros. He has his billion-dollar wealth based on speculation against the British pound. George Soros is a supporter of a tax on speculative capital movements. He knows that this is a very profitable activity. Since then, colleagues from CD&V have said that the tax pressure should not be increased. I believe that in order to finance a more human-worthy world, we should not limit ourselves to the system we have used since 1970, namely asking the different countries to spend a percentage of their GDP on development aid. Who brings it up? All of us. We all know very well how disproportionate the ratio between capital tax and labor tax in our national tax revenues is. If I listen to you, should we ask those who have an income from labour to finance the international challenges we face? I say that the capital must also contribute to this.

It is highly needed. In 2004, 54 countries worldwide were in a worse situation than in the early 1990s. If we continue as we are doing now, and we only want to ⁇ that in sub-Saharan Africa, which includes our ex-colonies, every child enjoys elementary education, while we do not change the funding, then we ⁇ that goal — that are figures from the World Bank; those are not from Van der Maelen — in 2129. Have you heard this correctly?

Minister Didier Reynders ⚙

The text submitted to us today, which was submitted to us in the Committee on Finance and for which I have proposed not to enter into a long debate – we have finally devoted very little time to the examination of the text itself – has no chance of entering into force one day, not simply because the authors of this text themselves foresee that it must be the subject of adoption by all the members of the euro area (the Twelve today, ⁇ a few more in a few years) but above all because it would be necessary for the members of the euro area to adopt the same text.

As I said in the committee and as everyone agrees, it is obvious that even if the debate on international taxation should progress, we should return to Parliament either with a proposal to amend or amend the current text, or a completely different text. This does not change much because the announced intention was to make a symbolic gesture. One can ask, Mr. Speaker, whether a text with a symbolic scope should pass through the vote of a bill, since it is a text of law that it is. I had proposed that at least the State Council be questioned about this, but without insisting. The committee, or at least the authors of the proposal, did not wish to take this path.

So, the Parliament will make a gesture right now that is a kind of recommendation to the international community. I am not opposed to this gesture being made, being understood that the debate that will continue will probably be about a very large number of different proposals. If it should be retained, as I said in the committee, it could only be retained by the members of the euro area and by the members of another monetary zone. In any case, we are progressing in a debate that has at least the merit of drawing attention to the need for financing development aid as well as the need to look for other sources of financing for this development aid – and I share this latter idea.

Geert Versnick Open Vld ⚙

You know that I am absolutely in favour of increasing our efforts in international cooperation. Together we praised and preached. In the meantime, we are realizing to spend a certain portion of our GDP — 0.7 percent — on international cooperation.

Minister Didier Reynders ⚙

Mr. Speaker, I said in the committee that I would send the text to the European Central Bank after the voting in the House. I will also send the text to the European Commission to provide clear information. I will also send this text to all my colleagues in the euro area. That is also normal. Ultimately, it is the Parliament’s request to follow, if possible, the same shipment in other countries. A similar but different text was presented at the National Assembly in Paris.

In any case, it is useful to have an opinion from the European Central Bank and the European Commission, and ⁇ also to conduct new discussions with all colleagues in the Eurogroup. So I will do it at the next meeting, maybe not next week, but in September or October. We must continue those discussions. The Netherlands has been holding the Presidency of the European Union since July 1.

In my opinion, this will be the only way to try to progress. I repeat, the Parliament makes the choice today, after a resolution, to make another symbolic gesture. There is nothing else to see in the approach that would lead to a vote. I will take this into account, on behalf of the government, in the same spirit, that is, by passing this symbolic approach to all my colleagues in the Eurogroup. I will, of course, keep Parliament informed of the reactions of all my colleagues at this meeting.

Mr. Speaker, I did not want to enter into the debate of the text since it has no other scope than to address a message to a number of actors in the international community. But it is obvious that, as many have requested, I will not fail to carry this message, as I have already had the opportunity to do for several years, within the G7, within the European Union, as well as within other international instances.

Dirk Van der Maelen Vooruit ⚙

However, if we approve that later, this is, as already said, not a end point; it is a starting point. We already voted on a resolution in this Parliament in 2001 — with which I would like to answer for a moment the question of why we do not adopt a resolution. In particular, we have asked the Belgian Government and the Minister of Finance to bring the debate on the Tobin tax to the European level. The Minister tried, but failed. Those who are in favour of the idea have said that they do not want to leave it there. If it cannot be done through the way of governments, they will try it through parliaments.

We have written a text that is a translation of the Spahn Variant of the Tobin Tax created by academics from various universities in Belgium based on the structure of the Sixth VAT Directive. This Directive is applied and used by more than 80 countries worldwide. So we used a technique that is easily exported.

On 8 July, a first meeting will take place in the European Parliament with a series of colleagues from the 25 Member States. The proposal has already been translated into most languages of the European Union and is supported by a broad civil society. It is intended that we can tempt 1, 2, 3, and ⁇ 5 or 6 other countries in the European Union to take a similar initiative to prove to their governments that there is a political majority in their societies and parliaments to take this step. The financing of a more human-worthy world cannot be left alone to the 0.7 countries, which is an unattainable goal for several countries. It usually involves money generated by the factor labour, as taxes on capital lower everywhere in the developed world. Because this factor is so mobile, you need to go to something international.

We believe that a Tobin tax, a tax on capital movements, is the best source of financing for these enhanced efforts in the field of international solidarity.

I hope we will soon give a majority in the House to the initiative.

Then the work begins for its supporters. With the bill, we will distract Europe and, if necessary, the rest of the world and try to convince them of the usefulness of this track.

We are not alone. James Wolfensohn, the President of the World Bank, has himself repeatedly confirmed that he is also of the opinion that the efforts cannot be financed in the way we are doing and that we should move to a source of interfinancing type Spahn tax. Soon, I hope, we will be the first parliament in the European Union to prove that there is a political majority here to explore that track.

President Herman De Croo ⚙

It was an interesting debate. The Minister has the word.

Minister Didier Reynders ⚙

The first — a lot has been talked about development aid — is the commitment made by Belgium to reach 0.7% of its gross domestic product in terms of development aid by 2010. I will have the opportunity — I have also recalled this with several European colleagues — to put this point on the table of the European Finance Ministers, but also of the planet, since we will meet again on the occasion of the World Bank sessions. In fact, it is the first of the solutions to ⁇ — many have recalled — the Millennium Goals. Otherwise, we would remain in a somewhat marginal debate. Belgium is progressing. In 2003, we exceptionally exceeded 0.6% of gross domestic product through debt relief for the Democratic Republic of the Congo. We are therefore on the right track to reach 0.7%; which is very rare not only around the world, but also in Europe.

If all OECD countries were to fulfill this commitment to reach 0.7% of GDP, we would probably have the means largely sufficient to ⁇ the goals set by many countries at international conferences.

It is in this spirit that, until now, the position of the government was the attempt to deepen the debate, not only in Belgium, but also on the international scene. This has been the case for some proposals. First, this was the case at the Belgian level. I requested a report to the High Council for Finance. We have had a report for a while now. Secondly, this was also the case at the European level. I asked for it in the Ecofin Council, during the Belgian Presidency, and we also have a report from the European Commission. This was also the case at the G7. We were a member of the G7 for a year. I have also asked for an international discussion on this subject. This is happening now. For example, with the World Bank we have many discussions related to international taxation, not only on speculation — I repeat it — but also in other fields.

Is it necessary to have a wet you come in Belgium? I think it is not, but according to the government in this also for me, is there is no problem yet to a vote over you go. In fact, it is the same thing that we do not vote over a wetsvoorstel or over a resolution. That is the same. The text submitted to us today, which was submitted to us in the Committee on Finance and for which I have proposed not to enter into a lengthy debate — we have finally devoted very little time to the examination of the text itself — has no chance of entering into force one day, not simply because the authors of this text themselves foresee that it must be the subject of adoption by all the members of the euro area (the Twelve today, ⁇ a few more in a few years) but above all because it would be necessary for the members of the euro area to adopt the same text.

So, the Parliament will make a gesture right now that is a kind of recommendation to the international community. I do not oppose that this gesture be made, being understood that the debate that will continue will probably be about a very large number of different proposals. If it should be held, as I said in the committee, it could only be held by the members of the euro area and by the members of another monetary zone. In any case, we are progressing into a debate that has at least the merit of drawing attention to the need for financing development aid as well as the need to look for other sources of financing for this development aid — and I share this latter idea. Mijnheer de voorzitter, ik heb in de commission gezegd dat ik de tekst na de stemming in de Kamer naar de Europese Centrale Bank zou versturen. I will also send text to the European Commission to provide you with clear information. I will also send text to all colleagues in the eurozone. That is also normal. Uiteindelijk is het de vraag van het Parlement om, als het mogelijk is, the same redering te volgen in other countries. Overigens werd een gelijkaardige maar andere tekst voorgelegd in national assembly in Paris.

Het is hoe dan ook nuttig om een advies te hebben van de Europese Centrale Bank en van de Europese Commission en misschien ook om nye besprekingen te voeren met alle colleagues in Eurogroup. I will do this for next meeting, maybe not next week, but in September or in October. We must continue the discussions. I will ask questions in the Netherlands, dated since 1 July the President of the European Union. In my opinion, this will be the only way to try to progress. I repeat, the Parliament makes the choice today, after a resolution, to make another symbolic gesture. There is nothing else to see in the approach that would lead to a vote. I will take this into account, on behalf of the government, in the same spirit, that is, by passing this symbolic approach to all my colleagues in the Eurogroup. I will ⁇ keep Parliament informed of the reactions of all my colleagues at this meeting.