Brigita Schmögnerová on the advantages of the Tobin tax

The financial transaction tax discussed by Nicolas Sarkozy and Angela Merkel is an optimum means for bringing speculators to heel, writes former vice-president of the European Bank for Reconstruction and Development Brigita Schmögnerová in the left-leaning daily Pravda: "A study by the Austrian Institute of Economic Research shows that a tax of 0.05 percent would reduce derivative trading by 60 to 70 percent. ... At the same time such a tax would channel 200 billion euros into the budgets of EU countries each year, and on a global scale as much as 500 billion. The proposal put forward by the European Commission last September is much more modest, foreseeing a tax of 0.01 percent. But even that would cut transactions by 30 percent and add more than 50 billion euros to the EU budget. The introduction of the tax would not be complicated. And there is also a solution to the potential problem of tax evasion - a merger between the two stock exchanges NYSE Euronext and Deutsche Börse currently being examined by the supervisory authorities. The question is whether tax will get the go-ahead already at the EU summit in January."

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