Personal Finance and Investing

The crisis facing Greece is likely to spread, so it’s in everyone’s interests to follow this unfolding tragedy. The TUC supports our colleagues in the Greek trade union movement, and the statements of the European Trade Union Confederation (ETUC) – and needless to say, we condemn the actions which led to the deaths of three people in a Greek bank last week. But the debate in Germany is a lot more concrete than in the UK because they’re part of the Eurozone, so it’s interesting to note that the debate in the German Parliament went far further than discussing sovereign debt and cuts in public services. The opposition social democrats (SPD, sister party of the UK Labour Party) abstained on the rescue package that Chancellor Angela Merkel proposed, because it didn’t include a financial transactions tax.

The SPD argued that, as well as providing guarantees for the loans that the Greek government desperately needs, we need to sort out the longer term aspects of Greece’s crisis. At the moment, the only option on the table is that the Greek government needs to cut spending – which will hit the poorest Greeks hardest, and leave those in the money markets speculating on Greece’s sovereign debts with a big, fat profit. The Greek trade union movement have advocated a different solution – not least, making sure the rich pay the taxes they are legally required to! But the German SPD advocate more radical tax solutions – they are calling for a Financial Transactions Tax (FTT – what we call the Robin Hood Tax in the UK) to meet the real economy costs of the crisis. Joachim Poss, deputy leader of the SPD parliamentary party, told ZDF television that ”‘Mrs Merkel must boost her credibility in fighting speculation and for an effective financial transaction tax in Europe”.

In the Bundestag debate last week, the SPD was joined in advocating an FTT by the Green Party and the Left Party, although the Greens voted for the package and the Left against. Indeed, even CDU Chancellor Angela Merkel supports an FTT, but could not get it included in the German rescue package because of the opposition of her coalition partners, the ultra-liberal Free Democratic Party (FDP).

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