While the US has embarked on a significant overhaul of its financial system and China has been growing at a blistering pace, the EU is lagging behind both on financial reform and on kick-starting growth. We have been too busy fighting fires partly of our own making.
Meanwhile our new-found enthusiasm for austerity measures is sure to stoke even more fires and has already sparked widespread social unrest across the Union.
The EU's citizens are mature enough to understand the need for some belt-tightening, but they resent the fact that the financial sector that is responsible for our misery is getting away scot-free.
Ex-Lehman banker says EU should crack down on big banks
Instead of addressing fundamental issues like the role of finance, politicians seem stuck in assuaging public anger, argues Sony Kapoor, manager of the international think-tank Re-Define, in an interview with EurActiv.
Kapoor, who has testified on financial regulation at the European Parliament, says world leaders have so far shown a lack of vision in reshaping the post-crisis financial system, arguing that it will be up to the EU's competition authorities to clean up.Outside Brussels, national leaders are missing the bigger picture, says Kapoor, though some have come up with "politically palatable" proposals.
Please click below to see an archived webcast of the European Parliament Testimony of Re-Define Managing Director Sony Kapoor on Financial Transaction Taxes. This hearing was conducted by the full ECON committee on the 2nd of December 2009.
Proponents of the financial transaction taxes (FTT) are happy that the tax is in the news again. However they can’t help but wonder if it is just another false dawn. It is not.
The financial crisis, the biggest in living memory, has massively titled the political and financial landscape in a direction that makes such taxes not just more desirable also much easier to implement.
Keynes was an early proponent of FTTs and the idea got a new lease of life when James Tobin extended it to currency markets. The Asian crisis helped revive the discussion and after falling off the agenda yet again the idea was brought back to life as a potential source of revenue for funding development. Each time it died a slow death. The opponents of FTTs won those battles but are about to lose the war. Here is why.