On the eve of a special EU summit on the Eurozone crisis (30 january 2012), Peter Kodwo Appiah Turkson, President of the Pontifical Council for Justice and Peace, supported the adoption of a tax on financial transactions, calling for a financial sector which creates wealth for the society as a whole. Cardinal Turkson intervened at the annual Board of Directors meeting of the international alliance of Catholic development agencies CIDSE, which has long advocated for an FTT.
Cardinal Turkson said: “One way of bringing economics and finance back within the boundaries of their real vocation, including their social function, would be through taxation measures on financial transactions. These should be applied with fair rates, modulated in proportion to the complexity of operations, especially those made on the ‘secondary’ market.
“Such an FTT would be very useful in promoting global development and sustainability according to the principles of social justice and solidarity. It could also contribute to the creation of a world reserve fund to support the economies of the countries hit by crisis, as well as the recovery of their monetary and financial systems.”
John Arnold, Auxiliary Bishop of Westminster, present at the CIDSE meeting, also supported the tax, urging sceptical governments like the UK to support an FTT as part of an economic life which puts human dignity at the centre.
Bishop Arnold said: “Human beings are both the source and the purpose of all economic activity, we have got to reform financial markets so that they can serve human well-being and society.”
The operation of financial markets has proven to be crucial in the redistribution of wealth. Speculative activities have been proven to generate economic fluctuations that have a destabilising impact on the economy. Economic instability, in turn, increases inequality as amply demonstrated by the current situation of many European societies.
An FTT would contribute to reducing speculation and stabilising financial markets, as well as raising urgently needed revenues. CIDSE calls for the EU summit to take concrete steps towards adopting the tax.
CIDSE President Chris Bain said: “Adopting an FTT at EU level is the right thing to do. It has the potential to raise funds to finance development and climate change projects and put in place measures for more justice and equity. We must not restore economic growth at all costs: a business as usual model that protects the interests of a few. Sceptics must realise that a tax on financial transactions could go a long way towards stabilising financial systems while tackling poverty in some of the most vulnerable countries in the world.”
