arch/ive/ief (2000 - 2005)

French PM Lionel Jospin has raised a small storm by declaring his support for a tax on international financial speculation – called the Tobin tax after its proposer US economist James Tobin. Socialist Party leader Jospin said on French TV that he would put the proposal to the next meeting of EU finance ministers.

The tax, which many NGOs have lobied for for some time, would see a small levy of 0.25 – 1% on all international currency transactions, its aim being to reduce the profitability and therefore the level of currency speculation, stabilising financial markets and reducing ‘runs' on vulnerable currencies. It would also raise billions of dollars which Jospin says could be used as aid to developing countries.

Other governments have given Jospin's speech a cool reception – in the UK, the Treasury claimed it would be unenforcable, while Germany rejected the idea.

The UK press reaction has been interesting; three of the broadsheets – the Independent, the Guardian and the Financial Times – carried the story and ran leaders on it. All made the reasonable points that the tax would be extremely difficult, if not impossible, to enforce, and that Jospin's gesture appears to be little more than ‘cynical electioneering' – he is expected to run for president early next year. The Guardian and the Independent, however, felt it necessary to become rather more strident. The Independent's Outlook column, for example, ‘Mr Jospin may not be about to succeed with utopian silliness like the Tobin tax, but his constant pandering to anti-globalisation ideology and thinking lends it a dangerous legitimacy which might eventually inflict real damage on the present free trade consensus.' The writer goes on to suggest that speculation is actually good for the global economy, even though, ‘speculators also wreak havoc with currencies in the developing and Third World, which is unfortunate but again can trigger necessary and beneficial economic reform.' Hmmm. Meanwhile, the Guardian's Notebook commentator appears to have their tongue only slightly in their cheek when they claim speculators ‘are an exceptionally useful lot, working day-in, day-out, risking their own wealth to supply a thing called liquidity.' What wonderful, self-sacrificing people, not at all like those greedy Third World farmers who whinge about losing their livelihoods when prices double overnight because of a run on their currency, when it's all for their own good…

The words ‘knee-jerk neo-liberal fundamentalism' don't spring to mind at all.

See also leaders and named columns in the Financial Times, Independent and Guardian, 30/8/01