Schroeder wants debate on Tobin tax


The German Chancellor joined French Prime Minister Mr Jospin today in seeking to address critics of globalisation but did not back his call for the "Tobin Tax" on financial flows.

"The French Prime Minister has recently raised the possibility of tax on short-term speculative capital flows," Mr Gerhard Schroeder said.

"Naturally I know the serious arguments against the so-called Tobin tax," he said.

Mr Schroeder said there were legal and political problems to implementing such a tax, but he said everyone was aware of the weak points of the world financial system, citing off-shore centres, hedge funds and derivatives.

Mr Jospin said last week France planned to ask its EU partners to urge international organisations to impose the Tobin Tax on world foreign exchange transactions.

The tax, named after US economist Mr James Tobin who proposed its introduction in the 1970s, would impose a charge on global currency transactions. It has been promoted by non governmental organisations to curb speculation and to raise funds for developing countries.

In his speech Mr Schroeder said he had no sympathy for the rioters who have disrupted recent international summits but said the questions raised by most of those protesting against economic globalisation deserved to be heard.

"With their criticism of unbalanced trading relationships or financial speculation that is pushing entire economies to the brink of ruin, they are in good company," Mr Schroeder said.

"When young people call for human rights development and welfare in all regions of the world, that is an expression of a living democratic culture," he said.