On Monday 8th March, European Parliament (EP) tabled a motion for a resolution on a Financial Transaction Tax (FTT) at EU level, as a follow on to the work initiated by the G20 in September 2009 and EU Council Conclusions of December 2009. On Wednesday 10th March, the resolution was passed in plenary.
An FTT could be used for a variety of domestic and international projects including climate change adaptation and mitigation and poverty alleviation. In its resolution, EP calls for innovative financial mechanisms to provide support for adaptation to and mitigation of climate change for developing countries, as well as for financing development cooperation. Using funds generated from FTT toward climate change projects would be in keeping with the Commission's recent Communication on International Climate work which calls for long-term finance for climate mitigation and adaptation projects through the use of innovative finance. A small levy imposed only on certain kinds of financial transactions between institutions only would bring in a huge amounts of income with little financial risk for consumers and regular citizens. The EP resolution says it any FTT must “imperatively avoid reducing EU competitiveness or hampering sustainable investment, innovation and growth.”
The European Commission and European Council are also investigating the feasibility of a global, national or EU level FTT. The Commission is currently working on ideas for 'innovative financing' in the context of global challenges, including financial transaction taxes.