CLEER WP 2011/4 - Van Vooren
The EU as a global Robin Hood: Proposal for a Multilateral Convention on a Global Financial Transaction Tax
Bart Van Vooren
In the wake of the financial crisis, taxation of the financial sector has forcefully re-emerged on the EU political agenda. Most recently, at the Sarkozy-Merkel meeting of 16 August 2011, both leaders agreed that they would jointly push towards imposing a financial transactions tax (FTT). Asked to look into the feasibility of this proposal, several studies have investigated the political and economic challenges to implementing the FTT. However, the degree of legal and institutional coordination required at global level for a successful implementation of this tax remains unexplored. This paper seeks to fill that lacuna, by proposing that in order to realize a global FTT, the EU must forcefully support further legalization and institutionalization of the global economic governance system. It must do so by proposing a binding multilateral treaty establishing the legal framework within which to levy, manage and disperse the proceeds of a global FTT. The paper then argues that individual Member States will be unable to exert sufficient influence in the G-20 to realize a global financial transaction tax. However, should the Union manage to speak with its proverbial single voice in a sustained lobbying effort at the highest political echelons, success may be within reach. This would have commensurate effects on the EU’s standing in the hearts and minds of European citizens: the EU as a global Robin Hood.