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The Belgian government has announced plans to use its EU presidency to put the Financial Transaction Tax (FTT) on the G20 agenda held in Seoul, Korea, from 11-12 November.

The announcement was made by Didier Reynders, Belgium’s Finance Minister, who also committed his government to work on the technical aspects of the FTT project at an EU level.

The FTT is a charge on a specific type of financial transaction designated as taxable. It is used as a tool to discourage short-term speculation without discouraging any other financial activity. Recent figures show that the application of an FTT at a rate of 0.05% could generate 200 billion Euros every year.

Anni Podimata, a member of the social democrats political group of the European Parliament, said: "The FTT is a significant tool to fight against speculation in financial markets which was one of the main causes of the recent financial crisis. In this way we can give a convincing and efficient response to EU citizens who are very sensitive to this issue. The people who are responsible for the collapse of the financial markets should pay their share to repair the damage they have caused. It is a matter of social justice.”

EI believes that the application of an FTT would allow governments around the world to achieve three core goals. Firstly, to repair the growing cost of the global financial and economic crisis by reducing unacceptably high rates of unemployment. Secondly, to fulfil important development assistance, like education for all children around the globe. Finally, the tax could help to dampen the financial markets’ speculative bubbles which pose high risks to many economies.

Consequently, EI welcomes the Belgian government’s use of its EU presidency to pursue the FTT and its application by G20 leaders in the near future.

For further information about the FTT please see Global Unions’ comments on the International Monetary Fund’s draft working paper Taxing Financial Transactions: Issues and Evidence.