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Tuesday, 21 September 2010

France and Spain push for tax on global capitalism

Steven Edwards

UNITED NATIONS — France and Spain called for a tax on global capitalism on Monday, telling the opening day of a UN summit on development the recession has made “innovative financing” essential to help the world’s poor.

Nicolas Sarkozy, the French President, and Jose Luis Rodriguez Zapatero, the Spanish Prime Minister, spoke after Ban Ki-moon, the UN Secretary General, called on rich countries to “not balance budgets on the backs of the poor.”

Canadian activists said Mr. Ban’s request applies directly to the Canadian government’s intention to freeze foreign aid next fiscal year as a deficit-reducing measure.

While the leaders of several developed countries have pressed the idea of launching a global finance tax before, speaking about it anew at such a widely attended summit gives it added weight.

“We can decide right here — why wait?” said Mr. Sarkozy.

“Finance has globalized, so why should we not ask finance to participate in stabilizing the world by taking a tax on each financial transaction?”

Mr. Zapatero said alternative financing was needed that is “not as vulnerable” as rich-country budgets during a recession.

“My government is committed to defending the new tax, and making it a reality…” he said.

“It appears sensible, just, and logical that we ask [for this] minimum effort to take millions of people out of misery.”

However, his government is among those cutting development aid in the face of the financial crisis.

In contrast, Canada’s new aid budget is US$5.165-billion, a record. It plans to freeze foreign aid next fiscal year to reduce the deficit.

The three-day conference is reviewing progress on eight development goals meant to halve poverty levels and improve living standards among the world’s poor by 2015.

Mr. Sarkozy said France would boost its contribution to the Geneva-based Global Fund to fight HIV/AIDS, tuberculosis and malaria in poor countries and challenged other nations to follow suit.

Insiders have suggested Stephen Harper, the Prime Minister, who will deliver Canada’s address today, will also announce increased payments to the Global Fund.

But Canada and the United States show little enthusiasm for a financial transaction tax.

Earlier, Mr. Ban said there has been progress in trying to achieve the Millennium development goals (MDGs), based on pledges governments made at the Millennium Summit in 2000.

But the advances were “fragile.… Being true means supporting the vulnerable despite the economic crisis,” he said.

“We must not draw back from official development assistance — a life-line of billions, for billions.”

The UN Secretary General will also call on rich countries this week to spend US$169-billion on a UN plan he says will save the lives of 15.6 million women and children by improving access to health care.

Progress on the MDG target of achieving a 75% reduction in maternal deaths during pregnancy has been slow.

Proposals for achieving the MDGs varied widely.

Evo Morales, Bolivia’s President who is vehemently anti-capitalist, wants the world’s resources nationalized so the “dividends they generate will remain” in their respective countries.

In keeping with his country’s gross national happiness index, Jigme Thinley, Bhutan’s Prime Minister, proposed adding “happiness” as a ninth MDG.

“Since happiness is the ultimate desire of every citizen, it must be the purpose of development to create enabling conditions for happiness,” he said.

Barack Obama, the U.S. President, will speak at the summit tomorrow. He is expected to reaffirm Washington’s commitment to the Millennium goals.

Aides say his administration is determined to boost the United State’s aid budget to US$52-billion, from its current level of about US$25-billion, despite concerns over the country’s economy and continuing high unemployment rate.

The U.S. President is expected to press for new strategies that would see recipient countries commit to becoming more accountable and increase their efforts against corruption.

France has been among the leading advocates of looking to new sources of financing for development, and was the first country to introduce a tax on airline tickets to pay for aid.

In addition to Spain, countries supporting him include Japan, South Korea, Brazil and Norway. Britain during the previous Labour government was for it, but the new government of David Cameron fears financial institutions will move to other regions, such as Asia.

Business leaders also say the tax would dry up financial flows and slow efforts to stimulate worldwide economic development.

Postmedia News


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