Fahdi Dkhimi and Catherine Korachais

The recent publication of the report “International action in Health and Social Protection: propositions for a French Influence”  illustrates how the influence concern is a preeminent trait of the French diplomacy, in all the fields of the French international cooperation. Whatever the issue, “taking the lead” has become a diplomatic obsession, one of the strategies to offset the “decline” of the French influence on the international scene. It is hence not surprising to hear an official statement ending with the words “France is ready to lead the way”, as occurred again last week, in a public statement from Henri Guaino, Nicolas Sarkozy’s special counselor.

The new Trojan horse of the French government is the taxation of financial transactions, introduced unilaterally on the 8th of February by the French president, Nicolas Sarkozy, in a public address. France had once taken the lead on this issue via its civil society, following the publication in 1997 of an editorial “Disarming the markets” in a well-established French monthly journal – Le Monde diplomatique – and the foundation in 1998 of ATTAC – Association for the Taxation of Financial Transactions and for Citizens’ Action. This organization grew worldwide quickly around the idea to impose a modest tax on financial transactions as a “top priority if the law of the jungle is not to take over completely in the next century” (Ramonet, 1997) and a way to eradicate poverty.

However, is the initiative taken by the French government meeting ATTAC’s expectations? Has the French conservative government taken up measures to bring the financial markets on heel?  Does it open the valves to new financial flows towards international development aid, as it is promoted for by the civil society?

The facts speak for themselves:  the proposed tax looks more like a readjustment, a step back made by a government that removed, in 2007, a similar tax (“impôt de bourse”: 0.3% tax on the stock exchange) that had been existing in France for 100 years. All along its mandate, the current government has taken highly regressive fiscal measures, leading to increased inequities in the French system as a whole, and in the health sector in particular. Can the public health community trust Sarkozy’s willingness to take such a progressive measure he once qualified himself as an “absurdity” if done unilaterally (watch the video)? The current proposition is limited both in its scope (only transactions of French firms with more than 1 billion Euros on market capitalization are targeted), and in its target: only the reduction of the public deficits is now mentioned, despite numerous official statements promising the allocation of the new revenue raised to international development assistance or solidarity.

Sarkozy’s measure is more likely to be an electoral move than a real commitment to a fiscal progressive “innovation”. Such a measure is politically appealing in a pre-electoral context strongly influenced by the instability rocking Greece and its potential domino effect, and by the downgrading of the French credit rating. Under the proposed format, the measure is however likely to do more harm than good to a noble cause that attempted to find a practical solution to major global challenges.  A sort of a death sentence for a great idea of taxation on financial transactions. In other words, not much to expect from the French lead on the taxation of financial transactions…

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