Robin Hood, the G20 and the Greek debt crisis – what came out of last week's summit?

November 7, 2011

     By Duncan Green     

It’s any campaigner’s nightmare – you work for months to get movement on a big issue at a summit, and then an international crisis max lawsonblows up and threatens to wreck both the agenda and your plans. But Max Lawson, Oxfam’s head of Policy and Advocacy, reckons that the Robin Hood Tax made significant progress last week at a G20 summit dominated by the Greek debt crisis. Here’s his last day wrap-up from Friday: It is all over. The diminutive Frenchman has spoken (at length). So what happened? We heard in the morning from South Africa that the French attempt to have a separate communique on the Financial Transaction Tax (FTT) had run out of time.  Which basically confirmed what has been the theme of the last few days – the ingredients for further movement on the FTT have been there all along but there was simply not enough time or diplomatic head space.  Frustrating, but not surprising.  We also heard that the Brazilians had won support from France on a global minimum for social protection in return for their backing on the FTT, which was interesting and impressive diplomacy by Dilma. All morning rumours circulated about possible agreements on various things that never came to fruition, mostly about boosting the resources of the IMF.  The emerging powers don’t want to fund the European bailout directly as it is too politically contentious, but they are interested in channelling money through the IMF, in return for a bigger share in the governance of the institution.  For nerds like me this remains fascinating, as the financial crisis continues to accelerate the shift of global power to the major emerging markets.  This is a febrile moment in history, and whilst shrouded in deadly dull financial speak, we are witnessing some major shifts that will shape the next century.  Mid-morning and NGOs had a briefing from the Gates Foundation staff on the G20 discussion yesterday of development, which took up about 45 minutes.  It seems there was some pretty good discussion and definitely having Bill and his report there meant the FTT got a lot more profile than it would have otherwise.  They confirmed that Germany was saying that they are open to potentially using some of the revenues from an FTT to finance climate change and development, which was good to hear.  The press conference finally started around 2pm. Just when I thought sitting in this lurid bunker of a press centre could not get any more surreal, it emerged that all of the many men’s toilets you go to in this huge complex have the Star Wars music on a permanent loop.  He didn't but Sarkozy et al did....Sarkozy spoke first about the euro of course and the commitments of the G20 to boost growth, but announced nothing new. He spoke at length about the action they have taken in naming 11 tax havens, which is of course good but not nearly enough, as it is only beating up on some small island states and ignoring the major companies creaming off profits through these havens and the fact that the biggest tax havens are in the G8, in London especially. Still, it’s good that this crucial issue is getting profile and some progress. It is similar to the FTT in many ways – a popular cause that taps into anger in rich and poor countries alike that companies and the richest individuals are avoiding their responsibilities and failing to contribute, meaning that ordinary people are faced with cuts in services and bankrupt governments.  Anyhow, then he moved onto the FTT.  He underlined that the FTT was now a mainstream issue, and had made it into the communique.  That there were big fights on this issue in the G20 with many against, but that plucky little France continues to push for it.  That in addition to France, Germany, Spain, Brazil and Argentina, they now had support from South Africa, the African Union, Ethiopia (Meles, the Ethiopian president attends the G20 representing NEPAD) and Ban Ki Moon.   He underlined that the process at the EU is the main one, and that this will be on the agenda at the EU heads of state meeting in January.  He said that whilst not in favour of the FTT, President Obama agreed that the financial sector should contribute more to the cost of the crisis. He confirmed that he believes that the majority of the revenue should be spent on development.  Later, in questions, he name-checked the Robin Hood Tax campaign, and reiterated that the banks must be made to pay back for the impact of the financial crisis they have caused. What does this mean?  Well it is definitely progress.  During his brief flirtation with the FTT before he lost the election, Gordon Brown compared taxing transactions to debt cancellation for poor countries.  Debt cancellation was initially the preserve of the radicals, ridiculed and dismissed by economists, but which then over a period of ten years and with a fantastic global campaign made the journey into the mainstream and into actual policy.  Sarkozy made a similar case for the FTT, and I think he is right in many ways, although the time-frame is a lot quicker.   I had a long debate with one of [UK finance minister] George Osborne’s advisers yesterday about all this, and he conceded that he felt the eurozone FTT was almost certain to go ahead now, and that they are scenario-planning to see whether the UK will benefit from it or not.  Germany are really serious about doing this, as are France, and at the moment what Merkel and Sarkozy want to do in the eurozone is very likely to happen.  In fact there are no major opponents of the tax in the eurozone, with the Dutch having changed their position recently.  All that would have been completely unthinkable two years ago.  The key question is whether all the fuss this week, and the involvement now of South Africa, Brazil and the other developing countries, is Robin_Hood_Mask-180x127enough to ensure that not just the French, but the Germans and the rest of the eurozone countries agree to spend some of the money on fighting poverty and climate change.  I hope so.  Either way the FTT took a big step in that direction today.  We need to keep the pressure up in the coming few months on Germany and France on the issue of how the revenues are used, and not stop campaigning until they stop talking big about this tax and actually go ahead and do it.  In France especially the pressure should be on Sarkozy to implement the FTT nationally too and stop hiding behind other countries.  Lots to do, but for now I am hanging up the bow and arrow and heading off for some vin, pain and the usual Gallic shrug when I ask whether they have a vegetarian option.]]>