The answer is “not Tobin”, no matter what this might seem. The Tobin tax is specifically a tax on foreign exchange transactions, originally designed to damp down movements in a notoriously volatile market rather than to raise money. Campaigners for a Financial Transactions Tax(FTT) have sensibly switched attention from said currency tax – which, given the lack of regulation of FX trading, is susceptible to traders simply switching jurisdictions – to levies on bonds and equities sales. Bill Gates, who was asked to look into this issue for the G20, sounds like he will be in favour of something similar, together with eminently sensible ideas such as raising tobacco taxes in developing countries and levies on shipping and airline fuel.
That said, the EU FTT doesn’t look particularly workable – and I’ve even heard rumours it was made deliberately so by sceptical Commission officials trying to sabotage it from within. A tax on transactions in a particular exchange, if it can’t be bypassed, makes perfect sense at least as a money-raising device. The UK, despite its continual whingeing and mewling about an FTT, has taxed British stock transactions through Stamp Duty for a very long time – and added a new version to cope with sales of uncertificated stock. A levy based on the tax residency of the investor looks more difficult to implement, as it is subject to the usual shifting of registration offshore. Read more
The news that the “troika” – the EU, the ECB and the IMF – will be returning to Athens on Thursday is a pretty strong signal that the next tranche of the current rescue programme is going to be released – a small mercy for Greece, at least, even if the next version of the bail-out is mired in division and uncertainty.
Among the various other displays of poor coordination in the bail-out is the difference of style: the IMF tends to send its mission chief back to a borrower country only when the negotiations are pretty much done and the fund is ready to disburse the next tranche; the EU thinks substantive negotiations should be done in-country and generally wants to send its top officials in at an earlier stage. Read more
Great back-and-forth from the Europeans on how much of a writedown they want private bondholders to take in the Greece bail-out but, as far as I can tell, not much of a strong opinion being expressed by the International Monetary Fund (and publicly none at all). Given that the IMF once expended a lot of political capital valiantly, though ultimately unsuccessfully, trying to institute a kind of sovereign Chapter 11 mechanism to allow private investors to be “bailed-in” to any rescue, this seems slightly odd. Read more
Welcome to our rolling coverage of the eurozone crisis. All times are London time. Curated by Esther Bintliff and John Aglionby on the world news desk in London, with contributions from FT correspondents around the world.
19.23: We’re winding up the rolling blog for today but thanks for reading, and do follow the rest of our coverage at ft.com/world. We’ll be back tomorrow to cover the crucial German parliamentary vote on expanding the EFSF (will Merkel preserve her absolute majority?) aswell as any other eurozone shenanigans…
19.21: Earlier we referred to some comments made by Angela Merkel in an interview with Greek TV late last night. Here’s the full story, from which:
Angela Merkel, German chancellor, has warned Greece that a €109bn rescue package, approved by the 17 eurozone leaders in July, may have to be reviewed if Athens fails to meet deficit reduction targets agreed with the European Union and International Monetary Fund.