Wednesday 31 March 2010

German government decided on bank levy

The German government decided today to introduce a bank levy. During a period of 10 years an amount of approximately €1.2bn shall be raised per year. All banks - i.e. also savings and cooperative banks - will have to pay the fee. However, the bulk of the amount (900bn) should come from the systemically relevant big banks. The revenues would go into a special fund. The fee should not be tax deductable. The government also decided rules which allow for breaking up banks which are "too big to fail" and new rules on the liability for managers.

The French minister of finance, Christine Lagarde, participated in the meeting of the German cabinet and said that France would introduce a similar levy. However, the revenues would not go into a special fund but into the current budget.

The civil society alliance for the Financial Transaction Tax came up with strong critique on the decision:
* The revenue is too small.
* It is only for future crises and not for paying for the burden of the present crisis.
* It has no regulatory effect.

Thus, the reasons for introducing the FTT continue to exist. Therefore the alliance will continue to pressure for the FTT. All three opposition parties in the Bundestag reject the decision.

Tuesday 30 March 2010

UNCTAD presses for economic governance reform

Substantial reforms – more than mere "window dressing" – should be pursued nationally and internationally to prevent opaque financial instruments, speculation, and the build-up of large financial imbalances between countries from causing a repeat of the current global recession, UNCTAD's Secretary-General urged last weekend. Secretary-General Supachai Panitchpakdi told the 122nd Assembly of the Inter-Parliamentary Union (IPU) that "the crisis provides a rare opportunity to forge a more balanced and inclusive global economy through two channels: measured government intervention and strategic policy action at the national level, and better coordinated and more inclusive economic decision-making at the international level."

In a statement Supachai said UNCTAD is concerned that with the worst of the financial crisis apparently over, "talk of reforming the financial sector, particularly at the international level, has become a good deal more muted. UNCTAD strongly believes that the crisis could have been prevented if there had been stronger governance mechanisms to regulate financial innovation and the build-up of various imbalances at the national and international levels. Moving forward on this reform agenda to create a new pattern of balanced and sustainable growth will require bold thinking."

Well-defined rules, with a transparent and fair system for judging infractions, should be "orthodoxy" for the international financial system as they are for the international trading system, Supachai said. "[I]t is … imperative to provide for an institutional framework for better international coordination of financial regulation and supervision… Such an agreement would hopefully address the current potential for regulatory arbitrage," he added. "Equally important is to reshape international monetary arrangements that help avoid the build-up of large current-account imbalances and their counterpart – large unbalanced asset positions across countries."

Supachai said that continued global dependence on a single reserve currency is becoming a concern, reviving the idea that an equitable system of special drawing rights (SDRs) might eliminate the need for developing countries to hold vast reserves of dollars as protection against reverses in their capital flows. These reserves "now represent a considerable opportunity cost for development," the Secretary-General said. Countries also could tackle large build-ups of reserves through regional arrangements such as the Chiang Mai Initiative, whose multilateralized currency swap agreement came into effect on 24 March. He also called for reform at the IMF "so that it can focus most properly on what its founders intended: the avoidance of contractionary macroeconomic responses to financial shocks and instability."

Agribusiness and the right to food

“Agribusiness can play a key role in realizing the right to food. But States have to give more support to their small producers and push corporations to change their pricing and standards policies”, said the UN Special Rapporteur on Right to Food, Olivier De Schutter, as he presented his second annual report to the UN Human Rights Council on 5 March 2010. His report concludes that in an increasingly globalized food sector dominated by large transnational corporations, smallholders have a very limited number of buyers, and are in a deeply unequal bargaining position in respect of a fair price for their crops. In these circumstances, sourcing and pricing policies of commodity buyers have a huge and sometimes negative impact on the right to food. This situation partly explains why smallholders in developing countries are the single most important group of those suffering hunger in the world today.

To address this situation and the specific needs of smallholders, the Special Rapporteur makes a series of recommendations to the agribusiness corporations and the States. According to the report, States have a number of tools they could use to strengthen the position of smallholders and allow them to reap a larger proportion of the food dollar in their transactions with buyers. In particular, De Schutter said “States could support the establishment of farmers’ cooperatives through appropriate legal frameworks, capacity building programs or tax incentives, thus enhancing the capacity of small producers to obtain higher prices when they seek to sell their produce. These organizations present many advantages in terms of services and information, and help the producers to implement the increasingly complex norms and requirements of buyers and public authorities active on regional and global food markets.

The UN Special Rapporteur also called on States to act against unfair practices of corporations, excessive concentration in the food chain, or abuses of dominant position acquired by certain actors. National competition laws play a fundamental role here. “Competition law as it currently stands is not appropriately tailored to the circumstances that weaken the bargaining position of smallholders”, he explained. “States where suppliers are based should extend the reach of their competition laws to foreign buyers whose abuses affect national sellers, developing regional responses if they are concerned about being vulnerable as a small economy.”

Noting that the pressure to produce at low prices was increasing on suppliers, leading to repress wages of agricultural workers and to the casualization of this workforce, the Special Rapporteur also made a number of recommendations on this issue. States must establish a clear legal framework with robust enforcement mechanisms. But in addition employers have a responsibility to respect the right to food, even where laws are insufficiently protective of agricultural workers or where the existing labour legislation is inadequately monitored: agribusiness companies must not contribute, directly or indirectly, to human rights abuses through their relationship with suppliers.

Please find the full report >>> here.

Friday 26 March 2010

EU Council : Lack of agreement on a Financial Transaction Tax

Brussels-based NGOs are deeply disappointed that European leaders have failed to agree on the introduction of an EU wide Financial Transaction Tax (FTT) at the EU Spring council on 25-26 March. The international alliance of Catholic development agencies CIDSE says a mini tax on short-term and high-risk transactions would stabilise the current financial system and generate millions of Euros badly needed to alleviate poverty and combat climate change. CIDSE campaigned for the inclusion of an EU wide adoption of a Financial Transaction Tax (FTT) on socially unproductive and speculative trading on financial markets in the run up to the Council.


Yesterday, while European leaders were arriving in Brussels to attend the Council, CIDSE, along with a coalition of development, environmental and health organizations, staged a ‘tug of war’. It saw bankers on the one side and Robin Hood, the symbol of a massive ongoing popular campaign demanding the adoption of a FTT, on the other, with EU leaders in the middle to decide if money should go to speculators or to people and the planet (see photo).

The European Parliament has asserted unequivocal support for robust and properly resourced EU action to tackle poverty and climate change and asked EU member states to agree on a financial transactions tax to help developing countries cope with the effects of the global financial and economic crisis. Despite broad public support and the backing of the European Parliament EU leaders have failed to come to terms on the FTT.

Wednesday 24 March 2010

Europe must play its part in rescuing the MDGs

A group of powerful women from the front-line in the fight against poverty have appealed to European leaders to ensure health and education for all people by rescuing the Millennium Development Goals. Testifying at the European Parliament, the ‘W8’ – a group brought together by Oxfam from Mali, Georgia, Thailand, Nicaragua, The Philippines, Bangladesh, Malawi and India – backed Oxfam’s call for Europe to adopt a “rescue package” to get the MDGs back on track.



The MDGs, signed by world leaders in 2000, commit to halving the number of people living in extreme poverty by 2015. With development aid faltering, the ability of poor countries to meet poverty goals is increasingly at risk. In a report to the UN general assembly this month, UN Secretary-General Ban Ki-moon said progress on the MDGs was being stymied by unmet commitments, inadequate resources and a lack of focus and accountability.

This comes in the wake of a warning by the European Commission that Europe’s international credibility was being undermined by Member States’ failure to stick to aid commitments; now €13bn ($17.6bn) short of 2010 targets. Oxfam spokesperson Elise Ford said: “With the MDGs teetering on the edge of failure, Europe can play a key role in rescuing the goals and at the same time salvaging its own international reputation. Without a European rescue package which includes a new credible plan to meet aid commitments, citizens in the poorest countries won’t get the most basic education and health care, and European leaders will not be able to hold their head high on the global stage.”

Responding to the W8’s call for a MDGs rescue plan, former UN Secretary-General Kofi Annan said: “With only five years to go, the need for concerted action to achieve the MDGs is becoming increasingly urgent. Last year’s global economic crisis has further aggravated the situation for billions of poor people around the globe. It is both timely and necessary to remind leaders of the promises they have made and the crucial necessity of their continuing commitment.”

Leonor Magtolis Briones of Social Watch Philippines said: “We have traveled to Brussels to appeal to European leaders not to abandon their promises to support health and education in developing countries. We see the desperate human cost of lack of basic services first-hand. A dramatic focus of political will and ambition and concrete actions plans are needed. If Europe agrees a strategy to achieve the MDGs, and world leaders to back it at the UN MDGs Summit in New York in September, 2010 could go down in history as the turning point in the fight against poverty.”

Thursday 4 March 2010

ActionAid report on biofuel consumption in Europe

Up to 100 million more people could go hungry if Europe commits itself to a huge increase in biofuels consumption in order to meet new European Union legislation, ActionAid says in a new report titled Meals per gallon: the impact of industrial biofuels on people and global hunger. The legislation states that 10% of transport fuels must come from renewable sources by 2020. EU member states will fill almost all of their renewables targets by using industrial biofuels – fuels made on an industrial scale from agricultural crops, including important staple foods. The vast majority of industrial biofuels are made from maize, wheat, sugar cane and vegetable oils such as palm oil, soy and rapeseed.

In its report ActionAid calculates that by 2020 biofuel consumption in the EU will jump nearly four-fold and that two thirds will be imported, mainly from the developing world. As well as diverting food away from the people who need it most, this will push up prices. It is estimated that for every 1% rise in the price of food, 16 million more poor people become hungry. ActionAid also says that most industrial biofuels do not save greenhouse gas emissions when compared to the fossil fuels they are replacing. The increasing use of biofuels is resulting in massive land use change, often in carbon rich habitats such as tropical rainforests. Using extra fertiliser to grow biofuels releases nitrous oxide, one of the most powerful greenhouse gasses.

Report author Tim Rice said: “Miracles do not grow on trees, or from any other plants for that matter. Using crops to fuel cars increases hunger while failing to help stop climate change. The huge expansion in industrial biofuels use must be stopped. To meet the EU deadline, the UK government is now writing its national action plan which will set out its strategy for renewable energy for the next ten years. This plan must not commit the UK to any further increase in industrial biofuels.”

To meet the EU 10% target solely from biofuels, the total land area directly required to grow industrial biofuels in poor countries could reach 17.5m hectares, well over half the size of Italy. ActionAid has already found that increased biofuel use is having disastrous impacts on the developing world. Multinationals are acquiring land on a colossal scale. Across developing countries as a whole, EU companies have already acquired or are in negotiations for at least 5m hectares. This has led to displacement of people, lack of consultation and compensation, broken promises about wages and job opportunities, and food scarcity.

ActionAid is calling on EU member states to ensure they do not lock in industrial biofuels into their 2010 national action plans. The charity also says that transport and energy consumption must be reduced, targets and financial incentives for industrial biofuels ended and more support given to small-scale sustainable biofuels in the EU and elsewhere.

Monday 1 March 2010

ITUC at UNCSW: Raising Voices for Working Women

More than 100 women representing trade unions from around the world will be demanding improved rights for working women at the 54th Session of the United Nations Commission on the Status of Women (UNCSW), which begins today in New York. The delegation includes members from the International Trade Union Confederation (ITUC), Public Services International (PSI), Education International, and UNI Global Union.

United Nations member states will be evaluating what progress has been made towards achieving gender equality—and identifying remaining challenges—15 years after the adoption of the Beijing Declaration and Platform for Action. “The Beijing+15 commemoration at this session of the commission is hardly a cause for celebration,” said Diana Holland, chair of the ITUC Women’s Committee. “Workers today are faced with the worst economic downturn since the Great Depression, with women particularly hard hit by unemployment, precarious work and increased burdens of unpaid family care.”

Trade unions will be presenting seven main recommendations. These include calling on governments to: adopt a strong political declaration reaffirming the Beijing Declaration and Platform for Action as the basic framework underpinning gender equality policies, and to apply the International Labour Organization's Global Jobs Pact and the ILO Resolution on Gender Equality at the Heart of Decent Work to all economic recovery strategies. The unions will hold a workshop on “Women in the Global Economy in a Time of Crisis” on 4 March. A second event will feature the release of trade union “Alternative Reports to Government National Reports”. These alternative reports from Canada, Turkey, Ghana, and Trinidad and Tobago will provide a reality check by highlighting the real situation of working women and their families on the ground.

For the joint trade union statement and more information, discussion and regular updates from the trade union delegation, visit the UNCSW blog at: http://unioncsw.world-psi.org