Oxfam reaction to Barroso’s extra €1 billion package for MDGs and EU Finance Ministers’ lack of action on bank taxation

European Commission President José Manuel Barroso promised today he would announce an extra €1 billion for the Millennium Development Goals (MDGs) at a major UN summit in New York later this month.

On the same day, EU Finance Ministers failed to demonstrate their determination to make the financial sector pay for its social irresponsibility. A Financial Transaction Tax (FTT) would raise hundreds of billions of Euros to protect poor people in Europe and developing countries and tackle climate change.

Elise Ford, Head of Oxfam's EU office, said:

"The European Commission is setting a great example by targeting unused cash for development to make money work effectively at a time when budgets are tight and MDGs are at a crossroads. It's an innovative solution without additional costs. Yet, EU Finance Ministers are not daring enough to match this action, and instead continue to prevaricate about moving on an FTT."

"EU leaders, meeting next month in Brussels, have the chance to make considerable further progress if they are serious about catching up on their MDG commitments and restore their credibility towards poor countries. A tiny tax on financial transactions would cost nothing to the taxpayer and would mobilize even 200 times more money to combat poverty than the €1 billion announced today by the Commission."

Notes to Editors

• Photos from today’s media stunt in Brussels by a large coalition of NGOs and trade unions calling on EU Finance Ministers to move on an FTT to raise money to fight poverty and climate change.
• Research carried out for Oxfam by Development Finance International found that 56 low-income countries face a $65bn hole in their finances as a result of the economic crisis.
• A Financial Transaction Tax (FTT) of around 0.05% would yield more than €400 billion globally every year at no cost to the ordinary taxpayer to fight global poverty and climate change. It would hit socially useless short-term speculation without significantly hurting the wider economy. Contrary to the protestations of critics, the International Monetary Fund (IMF), not known for its progressive policies, believes the tax is eminently feasible and would prove easy to collect. Leading economists such as Joseph Stiglitz, Paul Krugman and Jeffrey Sachs have publicly shown their support for an FTT.
• France, Germany, the UK, Belgium and Austria are all in favor of a further tax on financial institutions. Agreeing on an FTT is one of the key priorities for the G20 French Presidency next year, as President Sarkozy recently stated. A group of 60 nations including France, UK, Spain and Germany are in favor of introducing a tax on international currency transactions to raise funds for development aid.

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