Germany, France pitch Tobin tax on financial transactions to curb short term speculators

Germany's Finance Ministry says Berlin and Paris have jointly appealed to the European Union's executive to prepare the introduction of a tax on financial transactions.

Germany's Finance Minister Wolfgang Schaeuble and France's Pierre Moscovici are urging EU nations to agree to "enhanced cooperation" on the proposal and urged their European counterparts to appeal to the European Commission to implement the idea.

Named after Nobel Prize winning economist James Tobin, Tobin taxes are aimed at removing speculation from markets by imposing a microscopic tax whenever money is transferred between two parties.

The specifics of the current plan call for a tax of 0.1 per cent tax on stock and bond trades, and 0.01 per cent on other transactions such as currency conversions. The move would act as a curb on short-term speculators and give European regulators a way of raising billions and building an emergency fund to help fix any future financial disasters.

It's an idea that has come up in the past and has been repeatedly rejected by politicians, most recently last year when Britain killed a similar proposal because of displeasure with what the tax would do to "The City's" financial industry.

The plan is unlikely to secure a majority within the 27-nation EU. But Germany and France are pressing for its introduction by the legal detour of so-called enhanced co-operation, which would let it pass if one third (in this case nine) countries.

The proposal by Germany and France is an excellent mechanism to curb short term speculators and other financial con-artists and would  benefit European taxpayers.

EU-Digest

Energy Costs: The real reasons for high gasoline prices .......Wall Street - Financial Speculators

With gasoline prices approaching $4 per gallon in Madison, there are many factors that have been blamed by politicians and so-called analysts in the corporate media. Among those are tensions in the Middle East, supply and demand, OPEC policies, the Obama administration’s policies, etc.

While many factors can be considered in placing the blame for rising gasoline prices, the primary cause of the price increase is rarely mentioned - speculation on Wall Street. Wall Street is betting on higher oil prices in the future and that betting is causing prices to rise.

A recent article by Robert Lenzner, writing for Forbes, concludes that speculation adds $23.39 to the price of a barrel of crude oil, which translates to a $.56 increase in the price of gasoline at the pumps for Americans. In other words, relatively few players in the Wall Street casino with very deep pockets are placing huge bets on oil – and the consumer is paying.

For more: The real reasons for high gasoline prices - Madison Independent | Examiner.com

Occupy Wall Street and the Catholic Church Agree: It's Time to Tax Speculators

The Catholic Church has for many years raised objections to the patterns of globalization, concentration of wealth and economic equality that have encouraged the massive redistribution of wealth upward that has made the rich richer, the poor poorer and the middle class more vulnerable than at any time in generations.

And, now, as the Occupy Wall Street movement raises the issue of economic inequality, the church is stepping up with a proposal to begin to address the extreme injustice of a system that taxes working people for necessities but allows speculators to avoid even the most basic responsibilities.

EU-Digest

Anglo Saxon Financial Sector Manipulation: Stocks fall on euro zone downgrade talk - by Herbert Lash

The euro tumbled and stock markets retreated on today after speculation swept markets that ratings agency Standard and Poor’s was set to downgrade several euro zone countries.

"A senior euro zone government source" said several countries would be downgraded, but the region’s leading economy, Germany, was not included in S&P’s rating action.

“There seems to have been some sort of a leak from S and P and whether this is real or not, who knows. But the market is selling off as a reaction to this, giving it some credibility.”

Note EU-Digest: when is the EU finally going to wake-up and close the door to these Anglo Saxon financial speculators and their collaborators, operating and influencing the European economy.

For more: Stocks fall on euro zone downgrade talk - The Globe and Mail

EU's Barroso promises measures against speculators

European Union Commission President Jose Manuel Barroso says he will field new proposals by the end of the month to tackle some of the actions of market speculators, who many have blamed for making the financial crisis worse.

For more: EU's Barroso promises measures against speculators - BusinessWeek

EU crack down on financial industry? - Politicians ultimately responsible for uncurbed speculative transactions in the financial world

The European Union hit back on Thursday against U.S. criticism of plans to crack down on hedge funds, saying its push for openness in the industry met a commitment also given by Washington and others.

A spokesman for EU financial markets chief Michel Barnier denied the legislation would put foreign funds at a disadvantage.  "The EU decision to act on hedge funds is in line with a G20 decision to reinforce transparency," the spokesman, Amadeu Altafaj, said. "The new hedge fund rules do not discriminate against foreign players and are not protectionist.".

Brussels wants foreign investors -- such as New York hedge funds based in London -- to be more closely supervised as well as face stricter regulatory standards set in Europe.

Note EU-Digest: Despite frequent calls by several EU member states to put stricter rules in place to control the speculative practices of US based financial networks and Wall Street, nothing so far has been done to effectively curb these excesses.


Tom Landry the famous US football coach once said: "Most successful football players not only accept rules and limitations, I believe they need them. In fact I believe they are free to perform at their best, only when they know what the expectations are, and where the limits stand. I see this as a biblical principle that also applies to life. A principle our society as a whole has forgotten. You can not enjoy real freedom without limits".


It is high time politicians understand that they are ultimately accountable to the voters for the mess that is going on in the financial world and take action.



For the complete report: EU defends hedge fund rules against U.S. critics | Reuters

US Poll: 82% of Public Believe Wall Street Should Be Regulated More Toughly

American attitudes towards Wall Street are ambivalent. Most people believe that Wall Street benefits the country and that what it does is “absolutely essential.” However, attitudes towards the people who work on Wall Street are overwhelmingly negative and are far lower than they were before 2008 and the bail-out of large banks and other financial institutions, with little or no improvement over the last year. The net result? Fully 82% of all adults believe that Wall Street should be regulated more toughly.

For more: 82% of Public Believe Wall Street Should Be Regulated More Toughly | Business Wire

EU hits back at Geithner on regulation - by Nikki Tait

Top European Union officials hit back on Thursday at criticism from Tim Geithner, US Treasury secretary, who has accused Brussels of pushing ahead with rules to regulate managers of hedge funds and other alternative investment funds that could be protectionist.

A spokesman for Michel Barnier, the new EU internal market commissioner who is responsible for financial services regulation and to whom Mr Geithner addressed his concerns, said that the EU decision to act on hedge funds was in line with a G20 decision to reinforce transparency in the financial system.

The hedge fund rules will also need approval from the European Parliament, as well as individual member states.

For more: FT.com / Brussels / Business regulation - EU hits back at Geithner on regulation

EU financial rift with Anglo-Saxons: UK, US lash out at France, Germany over hedge fund regulation

There is no case for emergency action to crack down on naked selling of credit default swaps, as called for by France and Germany, British authorities said on 10 March. At the same time, the US warned that EU plans to regulate hedge funds could cause a transatlantic rift.

Greece, Germany, France and Luxembourg have called for speedy action to limit or even ban naked credit default swap (CDS) contracts, whereby the buyer has no stake in the underlying asset being insured against default. Greece has blamed naked CDS contracts on its sovereign debt for amplifying its bond market woes as it grapples with a huge budget deficit. "We need to think about it and think about it clearly but, given that, it is not the key driver of what has gone on with perceptions of Greek risk," Britain's Financial Services Authority chairman, Adair Turner, told reporters. European Union finance ministers will discuss possible action in the CDS market on 16 March after the bloc's executive said on Tuesday it would consider a ban on naked selling.

Note EU-Digest: Has Mr. Adair  Turner suddenly forgotten which role Goldman Sachs has played in the Greek Financial drama? Its high time to ban the Wall Steet bandits from the EU. If the Commission does not act the EU Parliament should.

For more: UK, US lash out at France, Germany over hedge fund regulation | EurActiv

EU urges US to join in action against speculators - by Aofi White

European officials urged the U.S. to join in a crackdown on speculators who bet against Europe's currency union, warning they might ban some credit default swaps — opaque financial instruments blamed for worsening the world financial crisis.

German Chancellor Angela Merkel said Tuesday that "quick action is needed," calling on the U.S. to "make a gesture" and curb the trades. Greek Prime Minister George Papandreou, in Washington, DC to meet with President Barack Obama, is also calling for curbs on speculation which he blames for making his country's debt crisis worse.

The European Commission threatened to ban "purely speculative naked sales on credit default swaps of sovereign debt" and said it would ask for a similar move globally at the Group of 20 summit of leading and emerging economies in June. Papandreou on Monday compared the practice of selling naked credit default swaps to buying insurance on a neighbor's house and then burning it down to collect.

Note EU-Digest: when is the EU Commission finally going to realize that talking about the issue to the US makes no more sense, because the US has basically caved in to accepting the financial industry and Wall Street's financial manipulations. Instead the EU needs to act immediately and unilaterally ban "purely speculative naked sales on credit default swaps of sovereign debt".

For more: The Associated Press: EU urges US to join in action against speculators