As European leaders gather in Brussels to discuss the EU 2014-2020 budget, CIDSE calls upon the EU to dedicate FTT resources to honour development and climate commitments with FTT revenues.
CIDSE news release – for immediate release, 21 November 2012
(Brussels, 21/11/2012) On Thursday (22 November) European leaders gather in Brussels to discuss the 2014-2020 European Union (EU) budget. Amidst talk of cuts including to development, there’s a silver lining to the dark cloud: the prospect of new revenues from a Financial Transaction Tax (FTT) within the EU. The international alliance of Catholic development agencies CIDSE calls upon the EU to honour existing development and climate commitments with new and additional FTT revenues.
The introduction of a Financial Transaction Tax (FTT) by the 11 Member States participating in the Enhanced Cooperation Agreement could yield the EU an additional 20 billion Euro per year1. Last week, EU President van Rompuy suggested revenues could be deducted from national contributions to the annual EU pot.
“The EU should earmark Financial Transaction Tax revenues for development and climate action, a logical and just continuation of the long history of policy discussions on the tax. This money should not be allowed to disappear in the EU budget, but be used where most needed,” CIDSE Secretary General Bernd Nilles said.
CIDSE’s call to use FTT money revenues for development and climate change is not new. For more than a decade, civil society has lobbied hard for FTTs to be one of the pillars of financing a new era of development. Many countries have already heeded this call. In 2005, the Belgian government laid down the necessary legislation for such a tax to be used to meet development objectives. A part of the revenue of the recently introduced FTT in France will also be spent on development. In Spain talks are currently ongoing to dedicate at least 50% of future FTT revenues to development.
Over the past few years, the EU has made important financial commitments to contribute to eradicating poverty and tackling climate change. It said it would spend 0.7% of Gross National Income (GNI) on development by 2015, but most member states are off-track to reach this target.
The EU is also struggling to keep its climate finance commitments. Alongside other developed countries, the EU agreed to support developing countries’ efforts to adapt to climate change with $100billion per year by 2020 via the UN Green Climate Fund. While money made available for the short term will all be spent by the end of the year, the EU has not yet indicated how it will scale up climate finance towards 2020.
“As a leader in the fight against poverty and climate change, the EU should put the money it pledged to the Green Climate Fund aside, showing the world that the EU is a reliable global partner which keeps its promises,” Nilles said.
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[1] Based on revenue collection upward of 32 billions euros for the 11 countries participating in the Enhanced Cooperation Agreement as estimated by DIW Berlin: http://www.diw.de/documents/publikationen/73/diw_01.c.405812.de/diwkompakt_2012-064.pdf.
Contact:
CIDSE Media and Communication Officer Roeland Scholtalbers, scholtalbers(at)cidse.org, +32(0)2 282 40 73, +32(0)477068384
Notes to the editors
- CIDSE is an international alliance of Catholic development agencies. Its members share a common strategy in their efforts to eradicate poverty and establish global justice. www.cidse.org
- CIDSE members: Broederlijk Delen (Belgium), CAFOD (England and Wales), CCFD – Terre Solidaire (France), Center of Concern (USA), Cordaid (the Netherlands), Development & Peace (Canada), Entraide et Fraternité (Belgium), Fastenopfer (Switzerland), FEC (Portugal), FOCSIV (Italy), Fondation Bridderlech Deelen (Luxembourg), KOO (Austria), Manos Unidas (Spain), MISEREOR (Germany), SCIAF (Scotland), Trócaire (Ireland)
- Going by the latest negotiating paper being considered by EU governments, cuts to development in the EU budget 2014-2020 might add up to €9.6 billion. Most affected would be the European Development Fund (EDF), the largest part of the EU aid budget that targets African countries. The EDF is facing a cut of 11% (€3.335billion) while the overall cut is 7%.
- The FTT for people and the planet – financing climate justice, CIDSE recommendations, June 2011