5 September 2001, 09:26 Schroeder calls on Germany, France to co-lead debate on currency speculation
NEW YORK (AFX) - German chancellor Gerhard Schroeder has called for
Germany and France to lead a debate on speculative international
capital flows, the Financial Times reported in its interactive edition.
Such a move would put one of the main demands of the
anti-globalisation movement on the European political agenda.
Addressing an international economic conference organised by his
Social Democratic party on the eve of an informal dinner in Berlin with
French president Jacques Chirac and Premier Lionel Jospin, Schroeder
said there is a need to recognise "weak spots" in the international
financial system, such as offshore centres, hedge funds and
derivatives.
"So I want to discuss with our European and especially French
partners how we can react to these relatively autonomous speculative
financial flows," he said.
The chancellor stopped short of supporting Jospin's recent espousal
of the so-called "Tobin tax". The tax, proposed by James Tobin, the
American economic Nobel laureate, would put a levy on turnover in
currency markets. The anti-globalisation movement has suggested the
proceeds of such a tax could be used for global poverty relief.
, Schroeder noted serious shortcomings with the Tobin tax. "For
example, how do you distinguish speculative financial flows from those
related to genuine trade finance?" he asked.
But the chancellor's comments, ahead of a meeting of EU finance
ministers in Belgium and a separate gathering of Social Democratic
leaders in Sweden this month, marked an important shift in Germany's
willingness to recognise the objections of the anti-globalisation
movement.
Describing the Tobin tax as one of many instruments which could be
used, the Chancellor said such issues needed to be discussed by
Europe's finance ministers "with all clarity".
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