We need a system of European, and beyond that, global governance
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We need a system of European, and beyond that, global governance
Wed, 03/12/2008 - 12:10
What should the EU do to shape our economic and social future in a globalised world?”
Economic nationalism cannot solve the challenges posed by globalisation. Neither will allowing the financial institutions or transnational corporations a free hand to do as they choose, while expecting the taxpayer to bail them out when crisis hits.
We need a system of European, and beyond that, global governance which includes the transnational regulation of financial markets as well as a capacity to tax such institutions in a way which prevents them from playing one country off another. Such a system of taxation, a Tobin tax, is necessary to stabilise those markets. It would also provide a valuable resource to fill the funding gap in the implementation of the Millennium Development Goals (MDG), and reclaim part of the democratic space conceded until now to the financial markets.
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if this can be a means of getting the tobin tax on the agenda, let's go for it. but it is not clear to me how this system will actually work. what do you have to do to get a proposal on the agenda? how do we make this system effective?
Roy H W Johnston PhD FInstP CIEI
Techne Associates: Consultants on Techno-economic,
Socio-technical, Political and Environmental Issues.
47 Meadowbank, Bushy Park Rd, Rathgar, Dublin 6;
Phone +353-1-490-4040; e-mail rjtechne@iol.ie;
website http://ww
if this can be a means of getting the tobin tax on the agenda, let's go for it. but it is not clear to me how this system will actually work. what do you have to do to get a proposal on the agenda? how do we make this system effective?
Roy H W Johnston PhD FInstP CIEI
Techne Associates: Consultants on Techno-economic,
Socio-technical, Political and Environmental Issues.
47 Meadowbank, Bushy Park Rd, Rathgar, Dublin 6;
Phone +353-1-490-4040; e-mail rjtechne@iol.ie;
website http://www.iol.ie/~rjtechne
It is clear that the financial system led us into the current crisis. There was a combination of very loose credit, with interests rates at historic lows, and sophisticated products which were supposed to eliminate risk were actuallly repackaging the riskiest loans and spreading them throughout the global financial markets in ways that will take years to unravel.
The question then is whether the EU can play a role in reforming the financial system? To date, the EU's response has been very mixed. Sarkozy, to his credit, showed leadership. Few European leaders could have used the Presidency to such effect which makes the case for a permanent European Council presidency as proposed by the Lisbon Treaty.
The fact that the UK is outside the Eurozone makes for confusion and there can be no serious project to reform the European financial markets without London. Within the Eurozone, the ECB and the system of national central banks with national financial regulators is very complex. Only the bankers understand how it works and I just don't see it driving reform.
The economic stimulus package agreed at the recent European Council showed (a) economic power still rests largely with the Member States (so much for the European super-state!) and (b) Germany and others are unwillingly to bail out those they regard as having been irresponsible (and they regard Ireland as a prime example).
Lisbon will not change the monetary structures significantly but it will give greater direction to the Council but the right of initiative rests with a Commission which is clearly divided on this issue and which will not now be streamlined under Lisbon (take a bow, Ireland!).
Ultimately the issue is: can the financial markets be reformed using EU procedures, even if Lisbon is implemented? The people of Europe are looking for leadership but a divided Commission and a divided Presidency is unlikely to provide direction in the next six months. At that stage, the people will deliver a verdict in the European Parliament elections.
If the EU does not address this issue quickly, it could easily come to be seen as part of the problem.