PARIS, (Reuters) – A group of 60 nations, including France, Britain and Japan, will propose at the U.N. this month that a tax be introduced on international currency transactions to raise funds for development aid, ministers said yesterday.
Speaking after a meeting in Paris, French Foreign Minister Bernard Kouchner said the group had agreed a common position for the United Nations Millennium Objectives summit on Sept. 21. Ministers estimated the tax could raise as much as $35 billion a year for development aid.
“For every 1,000 euros the tax we are suggesting will bring 5 cents,” Kouchner told reporters. “It’s not a lot, but enough to get things going.”
The global aid gap is estimated at $340 billion a year between 2012-2017, including $156 billion for climate change in poor countries and $180 billion for public development.
French President Nicolas Sarkozy has repeatedly supported the idea, but European Union leaders have struggled to convince the United States and other nations to put it on the G20 agenda.
At their last meeting in Toronto the idea was barely discussed, but Sarkozy in August highlighted it as one of his key objectives during France’s chair of the G20 from November.
“We know there is reluctance and that’s why we have chosen the simplest option,” said Spain’s Secretary of State for International Co-operation Soraya Rodriguez.
The 60-nation pilot group picked a multi-currency transaction tax as it would be the easiest to implement internationally, she said.
The tax, which would raise an estimated $25 billion to $35 billion a year, would be imposed on transactions in British sterling, euros, dollars and yen and would need the backing of the relevant central banks.
Twelve countries among the 60 are heading up the project and appointed a panel of international experts last year to outline viable options.
The report said the currency tax was the preferred solution, but also gave other options, including a financial sector activity tax, a value-added tax (VAT) on financial services, a broad financial transactions tax and a nationally collected single currency transaction tax.
