Needed: a common approach
05. Jul 2010 by Boerse Muenchen
Dr. Christine Bortenlänger,
Managing Director of the Munich Stock Exchange
Germany's introduction of a tax on financial transactions would be counterproductive, should it be undertaken unilaterally – without international-level coordination. Needed is the implementation by all of the G-20 countries of an approach. Prime 'victims' of the lack of this coordination would be Germany's economy and the country's private investors. Contrary to the aspirations of Germany's federal government, not affected by this tax would be “international-level speculators and the other parties responsible for the current crisis.” The rejection of the German government's proposals on such taxes at the recently-held G-20 summit was to be expected. The European-level legislation proposed by Germany and France has yet to take concrete form.
In an extensive position paper released in February 2010, the Munich Financial Center Initiative expressed its views on the subject. The positions expressed in it still very much apply. The only way to prevent evasions and distortions of competition is to make sure that this tax has a single set of rates and a global reach. The failure to achieve this has prevented the introduction of the tax, though often broached, over the last 30 years.
A further point speaking against the tax: it would not primarily affect banks, but rather the German state, and, through it, the country's economy. The tax would increase the state's costs of capital procurement, increasing its expenditures in the process. This would constrain the state's ability to maneuver. This, in turn, would hinder economic growth.
Managing Director of the Munich Stock Exchange
Germany's introduction of a tax on financial transactions would be counterproductive, should it be undertaken unilaterally – without international-level coordination. Needed is the implementation by all of the G-20 countries of an approach. Prime 'victims' of the lack of this coordination would be Germany's economy and the country's private investors. Contrary to the aspirations of Germany's federal government, not affected by this tax would be “international-level speculators and the other parties responsible for the current crisis.” The rejection of the German government's proposals on such taxes at the recently-held G-20 summit was to be expected. The European-level legislation proposed by Germany and France has yet to take concrete form.
In an extensive position paper released in February 2010, the Munich Financial Center Initiative expressed its views on the subject. The positions expressed in it still very much apply. The only way to prevent evasions and distortions of competition is to make sure that this tax has a single set of rates and a global reach. The failure to achieve this has prevented the introduction of the tax, though often broached, over the last 30 years.
A further point speaking against the tax: it would not primarily affect banks, but rather the German state, and, through it, the country's economy. The tax would increase the state's costs of capital procurement, increasing its expenditures in the process. This would constrain the state's ability to maneuver. This, in turn, would hinder economic growth.