Day 4 at the G20 for Robin Hood: Napoleon and Star Wars
So it is all over. The diminutive Frenchman has spoken, at length. So what happened? In the final press conference, President Sarkozy 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, UN Secretary General.
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 in January. He then reiterated 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.
We heard in the morning from South Africa that the French attempt to have a separate communique on the FTT had not succeeded and had run out of time. Which basically confirmed what has been the theme of the last few days – the ingredients for further movement on FTT have been there all along but there was simply not enough time or diplomatic head space to make this move further. Frustrating, but not surprising. We also heard that the Brazilians had exacted support from France on a global minimum floor for social protection in return for their support on FTT which was interesting and impressive diplomacy by Dilma.
All morning rumours circulated about possible agreements on various things which 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. But they are also so tied together too – the old adage that if you lend someone ten pounds and they become bankrupt it is their problem, but if you lend them 10 million then it is your problem. This is true for Germany and France with Greece, and true for China with the US and Europe. This is a febrile time, and whilst shrouded in deadly dull financial speak, we are witnessing some major shifts which will shape the next century.
Mid morning NGOs had a briefing from the Gates staff on the G20 discussion yesterday of development, which took up about 45 minutes in the end. It seems there was some pretty good discussion and interventions by a few and definitely having Bill there and his report meant it got a lot more profile than it would have otherwise. They confirmed that Germany was saying that they are open to using some of the revenues from an FTT to finance climate change and development which was good to hear.
Just when I thought sitting in this lurid bunker could not get any more surreal, it became clear that whichever of the many men’s toilets you go to in this huge complex, they have the star wars music on a permanent loop. In fact the press auditorium was a bit like the medal scene, but instead of Princess Leia we had Sarkozy instead. So finally the press conference started around 2pm. Sarkozy spoke first about the euro of course and the commitments of the G20 to boost growth, but announced nothing new. He was asked by Paul Mason of the BBC how he felt about dictating the politics of Italy and Greece, to which he replied ‘maybe it is because you are from an island, you don’t understand European politics’ which was very amusing. Paul immediately tweeted that Napoleon was also from an island. Touche.
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 profits through the use of these havens and the fact that the biggest tax havens are in the G8, in London especially. Still good that this crucial issue is getting profile and some progress. It is so similar to the FTT in many ways as it is a popular cause that taps into anger in rich countries and poor countries that companies and the richest 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, UN Secretary General. 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 in January. He then reiterated 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 an idea that was the preserve of the radicals, violently dismissed by economists, that first made the journey into the mainstream and into actually happening, over a period of ten years and with a fantastic global campaign. Sarkozy made a similar case for the FTT, and I think he is right in many ways, only the time-frame is a lot quicker.
I had a long debate with one of 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 as Paul Mason pointed out, 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 enough 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 this issue of the revenues, 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 as I ask whether they have a vegetarian option.